tccf

"The tccf debt was paid off by Desmarais over the next few months through the sale of some tccf assets. Levesque also kept 12 percent of tccf and control of f-i-c Fund Inc., a tccf subsidiary. Over the next year, Desmarais traded or sold some of tccf’s holdings to f-i-c in return for more tccf shares, until Gelco finally controlled more than 57 percent of tccf."

"There was another problem Desmarais faced — money. Gelco’s wealth took the form of Imperial Life and Provincial Transport stock. Gelco was using its earnings directly, or leveraging them (borrowing against them) to buy into blue-chip and speculative investments. In a move to streamline Provincial Transport, Desmarais had also sold Quebec Autobus and used the proceeds to buy the last of the in¬ dependent inter-urban bus operations in Quebec. So, for continued growth, Desmarais had recently issued a $5-million, 15-year deben¬ ture on Provincial Transport Enterprises Ltd. He didn’t want to sell either operation, as they were good moneymakers. Basically, Desmarais had good assets, clean balance sheets, and income, but no surplus large enough to buy 51 percent control of tccf, which would cost about $30 million. This essentially sums up the 1960s for Desmarais: a search for a ready and continual source of cash to finance his vision; and creative wheeling and dealing to acquire the assets that could be liquidated for the cash he needed. When Levesque decided at the end of 1964 that he was going to sell tccf whole, he also agreed that Desmarais would get the com¬ pany. They began working out the details in early 1965, and the final shape of the deal was hammered out that April in the Florida sunshine. Desmarais, through Gelco, would make a public offer for 55 percent of tccf for $28.6 million (2.2 million shares at $13 each). This would be accepted, tccf would, in turn, purchase Provincial Transport and the shares of Imperial Life from Gelco for $31 million. The $31 million would be paid to Gelco, which would use $28.6 million of the payment to pay tccf shareholders for their shares."

"So, tccf was simply a vehicle of growth, another rung on the ladder. As assets with definable values, cash flow and growth poten¬ tial, the tccf holdings were like a savings account, to be drawn upon for the cash for further acquisitions in the areas where Desmarais wanted to concentrate assets. Most of the tccf holdings were traded and sold during late 1965 and throughout 1966 so Desmarais could retire tccf debt and raise operating and reinvestment cash. Some went into a new real estate division, Trans-Canada Realty Corp. Some assets were sold back to Levesque, among them a publication called Le Petit journal. What had seemed in early 1965 a simple sale and resale was actually the beginning of a corporate reshuffle that, at its end almost a year and a half later, left both parties holding the cards they wanted in the first place. It’s interesting to note that by 1968, only two of the tccf"

"When Levesque allowed the tccf takeover, he wanted to keep a few of its assets as components of his future plans. The most efficient way to do so, without disrupting business or affecting asset values, was to sell all of tccf to Desmarais, the willing buyer who would willingly sell him back what he wanted to keep. Levesque used F-i-c Fund, an old subsidiary detached from tccf, as the vehicle for the repurchase. Wamock-Hersey was Thomson’s vehicle to keep the companies he wanted, but first, the Power-TCCF merger had to be completed and Desmarais had to get a firm grip on Power, so that he could start shuffling the deck."