Finance Committee on May 4th, 2010

[Cécile Cléroux]

There are financial consultants currently helping us regarding the process initiated in December 2009. They are helping us carry out the privatization operations in order to get offers on the part of Atomic Energy of Canada Limited that relates to the CANDU reactors. Only the commercial part of the Crown corporation is regarded as being privatized.

[Daniel Paillé, Bloc, Hochelaga, QC]

So the financial consultants have been retained only to examine the commercial aspect and not the valuation of the corporation's entire assets.

[Cécile Cléroux]

That's right.

[Daniel Paillé, Bloc, Hochelaga, QC]

I assume that this part will eventually be broken up to be sold. Obviously, it isn't assets that will be sold, it's a company.

[Cécile Cléroux]

What we receive from investors, the offers that will be considered, will be among the factors studied. They will be presented to Cabinet. Cabinet will make a decision on the operation that will have to be undertaken to proceed with the sale of the commercial part. At present, in the legislation, all the options are covered, and this gives the government the flexibility required.

[Daniel Paillé, Bloc, Hochelaga, QC]

I have to say that it is very well written and it sets out all the powers needed by the people who will then be doing the work.

Concerning the brokers you have retained, are there several of them? Was there an invitation to tender? May we know who was selected?

[Cécile Cléroux]

The tender process was initiated by our colleagues at Public Works and Government Services Canada. Under that process, a firm was selected. It is N M Rothschild & Sons Limited.

[Daniel Paillé, Bloc, Hochelaga, QC]

Has that firm done a valuation of the assets to be sold, based on whether it is sold 100% or in separate pieces?

[Cécile Cléroux]

Studies were done before the operation initiated in December 2009. That led to the decision announced in May 2009. When that decision was announced, a summary was also done of the analyses that had been done before. It can be accessed on the Natural Resources Canada Internet site.

[Daniel Paillé, Bloc, Hochelaga, QC]

I assume that the summary doesn't set a maximum price.

[Cécile Cléroux]

That's right, because that is part of what potential investors are being asked to evaluate.

[Daniel Paillé, Bloc, Hochelaga, QC]

We are both following the same reasoning. For the sale of the company, have investors already been approached by N M Rothschild & Sons on behalf of the government of Canada, in spite of the fact that the legislation has not been enacted?

[Cécile Cléroux]

The process was initiated in December 2009. A number of investors were solicited. The operation is underway. We are committed to ensuring that the process will happen quickly.

[Daniel Paillé, Bloc, Hochelaga, QC]

Was a teaser sent to some potential investors?

[Cécile Cléroux]

The process includes information relating to the government's initial expectations, how to get offers, as in the course of any other privatization operation.

[Daniel Paillé, Bloc, Hochelaga, QC]

Is it at the confidentiality agreement stage?

[Cécile Cléroux]

They were signed by the investors a long time ago. That goes back to when the operations were initiated, in December 2009.

[Daniel Paillé, Bloc, Hochelaga, QC]

So by including the confidentiality agreement, we can say, the basic document was detailed enough to be able to proceed with the sale of the company. You know exactly what assets will be included in the dower package.

[Cécile Cléroux]

Starting in December 2009 we said that the part in question was the nuclear reactor division of Atomic Energy of Canada Limited. That is the part that is the subject of transactions with private investors.

[Daniel Paillé, Bloc, Hochelaga, QC]

Concerning the division that will be sold, if I take the Hydro-Québec contract for repairing or upgrading the Gentilly-2 plant as an example, I would like to know whether that contract will be part of the dowry in the package the eventual purchaser acquires.

[Cécile Cléroux]

That is part of what is currently being examined by potential purchasers. It is premature to determine what offers will be submitted to the government and what decision will be made when the time comes.

[Daniel Paillé, Bloc, Hochelaga, QC]

But the maintenance contracts are specifically part of the commercial bill for the company to be sold.

[Cécile Cléroux]

The maintenance contracts and the contracts for extending the useful life of the reactors are part of the potential package that can be considered by investors.

[Daniel Paillé, Bloc, Hochelaga, QC]

The Quebec employees who are located on McGill College Avenue in Montreal, would they necessarily be transferred to the privatized company?

[Cécile Cléroux]

That will depend on the offers to be considered and the decisions to be made by Cabinet when the time comes.