Bell Canada's $50 billion acquisition in doubt

26.11.2008

But he added KPMG would have to evaluate the company's ability to pay off existing debt, plus service its defined-benefit pensions.

"The way these pension funds work is you have to maintain a certain amount of capital in order to service the debt in the future," Hoey said. "The way you operate these pension funds is you make investments in other stocks, you may buy some bonds from the Government of Canada."

He added if the value of these securities drops, then regulators will tell BCE to top of its contributions to the pension funds.

In its third-quarter financial report, the company stated it "may be required" to increase contributions to its defined benefit pension plans, "depending on future returns on pension plan assets, long-term interest rates and changes in pension regulations, which may have a negative effect on our liquidity and results of operations."

The company also has nearly $10 billion in long-term debt.