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Broadcasting Decision CRTC 2003-91
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Ottawa, 7 March 2003
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Corus Entertainment Inc., on behalf of 591987 B.C. Ltd. and 11 other licensee companies
Toronto, Ontario
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Application 2002-0905-8
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Intracorporate reorganization within the Corus corporate group
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1.
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The Commission has received an application by Corus Entertainment Inc. (Corus), on behalf of 591987 B.C. Ltd. and 11 other licensee companies, for authority to effect a multi-step intracorporate reorganization within the Corus corporate group for tax planning purposes.
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2.
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The Commission notes that the proposed intracorporate reorganization will affect the following licensees:
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- 591987 B.C. Ltd. (591987), which is the licensee of the television programming undertakings CHEX-TV Peterborough, CHEX-TV-2 Oshawa and CKWS-TV Kingston, Ontario;
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- 591989 B.C. Ltd. (591989), which is the licensee of the radio programming undertakings CFFX and CFMK-FM Kingston, CIMJ-FM and CJOY Guelph, CIQB-FM Barrie, CIZN-FM Cambridge, CKCB-FM Collingwood, CKDO and CKGE-FM Oshawa, and CKRU and CKWF-FM Peterborough, Ontario;
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- 591991 B.C. Ltd. (591991), which is the licensee of the radio programming undertakings CFEL-FM Montmagny, CJOI-FM and CIKI-FM Rimouski, CFVM-FM Amqui, CFZZ-FM St-Jean-sur-Richelieu, and CJDM-FM Drummondville, as well as a network in Rimouski, Quebec;
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- Corus Radio Company (Corus Radio) and Corus Premium Television Ltd. (Corus Premium), which are the licensees of numerous radio programming undertakings in Ontario, Alberta and British Columbia, and Manitoba (see Appendix 1);
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- CKIK-FM Limited (CKIK-FM), which is the licensee of radio programming undertakings CKIK-FM and CHQR Calgary, Alberta;
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- Metromedia CMR Broadcasting Inc. (Metromedia), which is the licensee of the radio programming undertakings CFQR-FM and CINW Montréal, CIME-FM St-Jérôme, CINF and CKOI-FM Verdun, CKOO-FM Longueuil, as well as one network in Longueuil and one network in Montréal, Quebec;
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- YTV, Canada Inc. (YTV), which is the specialty licensee of YTV, Treehouse and Edge TV;
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- Lifestyle Television (1994) Limited (Lifestyle), which is the specialty licensee of the Women's Television Network, also known as W;
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- Max Trax Music Ltd. (Max Trax), which is the licensee of a pay audio programming undertaking;
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- SuperChannel Ltd. (SuperChannel), which is the specialty licensee of SuperChannel; and
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- MovieMax! Ltd. (MovieMax), which is the specialty licensee of MovieMax.
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3.
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The intracorporate reorganization is to be a multi-step transaction, as described below.
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Step 1
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- The effective control of 591987 will be transferred to YTV through the transfer by Corus of its 100 Class A common shares and 50,500 second preferred shares in 591987, in exchange for 19 Class A common shares in YTV and a promissory note.
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- Corus will then transfer to 3470644 Canada Inc. (3470644) 19 Class A common shares in YTV for one common share in 3470644.
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Step 2
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- The effective control of 591989 and 591991 will be transferred to Corus Premium through the transfer by Corus of 100 Class A common shares and 36,000 second preferred shares in 591989, as well as 100 Class A common shares and 14,000 second preferred shares in 591991, in exchange for one Class A common share in Corus Premium and a promissory note.
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Step 3
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- The effective control of Corus Radio will be transferred to Belcand Mount Royal Holdings Inc. (Belcand) through the transfer by Corus of 1,000 Class B common voting shares in Corus Radio, in exchange for one Class C share in Belcand.
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- Corus will exchange all the issued and outstanding shares in Belcand for 100 Class B shares and 175,000 newly created special preferred shares in Belcand.
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- Corus will then transfer its 175,000 special preferred shares in Belcand for a promissory note.
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Step 4
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- The effective control of Corus Audio & Advertising Services Ltd. (Corus Audio) will be transferred to 624723 B.C. Ltd. (624723) through the transfer by Corus of its 100 Class A common shares in Corus Audio, in exchange for one Class B common share in 624723.
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- Corus will then exchange two Class A common shares and one Class B common share in 624723 for 100 newly created Class D common shares and 247,000 newly created special preferred shares in 624723.
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- Corus will change the ownership of 624723 by transferring the 247,000 newly created special preferred shares as follows: 47,000 special preferred shares to YTV; 50,000 special preferred shares to 591987; 20,000 special preferred shares to 591989 and 130,000 special preferred shares to SuperChannel, in exchange for promissory notes.
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Step 5
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- Corus will transfer its 101 common shares in the capital of 3470644 to 1421711 Ontario Inc. (1421711) in exchange for one common share in the capital of 1421711.
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- Corus will then exchange all of the voting preferred and common voting shares in the capital of 1421711 for 100 newly created Class A common shares and 515,000 newly created class of special preferred shares in 1421711.
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- Corus will then transfer the 515,000 newly created class of special preferred shares in 1421711 as follows: 80,000 special preferred shares to CKIK-FM; 70,000 special preferred shares to SuperChannel; 10,000 special preferred shares to MovieMax; 240,000 special preferred shares to Corus Premium and 115,000 special preferred shares to Lifestyle, in exchange for promissory notes.
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4.
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As a result of this multi-step transaction, 591987 will become a wholly owned subsidiary of YTV (Step 1); 591989 and 591991 will become wholly owned subsidiaries of Corus Premium (Step 2). Belcand will own all the voting shares of Corus Radio (Step 3). Corus Audio, which wholly owns Max Trax, will become a wholly owned subsidiary of 624723 (Step 4). Finally, 1421711 will become the owner of all the voting shares of 3470644 (Step 5).
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5.
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The Commission notes that the proposed intracorporate reorganization would have no impact on the ultimate control of 591987 and the other affected licensees. Ultimate control would remain with Corus.
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6.
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The Commission approves the application by Corus to effect an intracorporate reorganization of the Corus corporate group.
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7.
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The Commission will modify its ownership records accordingly.
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Secretary General
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This decision is to be appended to the licence. It is available in alternative format upon request, and may also be examined at the following Internet site: www.crtc.gc.ca
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Appendix 1 to Broadcasting Decision CRTC 2003-91
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Intracorporate reorganization within the Corus corporate group
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Corus Radio
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Corus Premium
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Ontario
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Ontario
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- CFHK-FM St. Thomas
- CFLG-FM Cornwall
- CFNY-FM Brampton
- CFPL London
- CFPL-FM London
- CHAY-FM Barrie
- CJSS-FM Cornwall
- CJUL Cornwall
- CJXY-FM Burlington
- CKDK-FM Woodstock
- One transitional digital radio undertaking in Toronto
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- CFMJ Toronto
- CHML Hamilton
- CILQ-FM North York
- CING-FM Hamilton
- 2 networks in Toronto
- 2 transitional digital radio undertakings in Toronto
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Alberta
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Alberta
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- CHQT Edmonton
- CISN-FM Edmonton
- CIZZ-FM Red Deer
- CKGY-FM Red Deer
- CKRY-FM Calgary
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- CHED Edmonton
- CKNG-FM Edmonton
- 2 radio networks in Edmonton
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British Columbia
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British Columbia
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- CFOX-FM Vancouver
- CHMJ Vancouver
- 2 transitional digital radio undertakings in Vancouver
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- CFMI-FM New Westminster
- CKNW New Westminster
- 8 radio networks in New Westminster
- 2 transitional digital radio undertakings in Vancouver
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Manitoba
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- CJOB Winnipeg
- CJKR-FM Winnipeg
- One network in Winnipeg
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Appendix 2 to Broadcasting Decision CRTC 2003-91
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Intracorporate reorganization within the Corus corporate group
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(Ownership structures pursuant to decision)
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591987 B.C. Ltd. - Step 1
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Shareholder
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Class
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Number held
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% of votes
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YTV Canada, Inc.
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Class A common
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100
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100%
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YTV Canada, Inc.
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Second preferred
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50,500
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YTV Canada, Inc. - Step 1
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Shareholder
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Class
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Number held
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% of votes
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3470644 Canada Inc.
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Class A common
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1,019
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100%
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SuperChannel Ltd.
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Preferred series 1
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65,250
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MovieMax! Ltd.
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Preferred series 1
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21,750
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3470644 Canada Inc. - Step 1 (see also Step 5)
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Shareholder
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Class
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Number held
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% of votes
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Corus Entertainment Inc.
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Common
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101
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100%
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Corus Audio & Advertising Services Ltd.
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Preferred
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1,000
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591989 B.C. Ltd. - Step 2
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Shareholder
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Class
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Number held
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% of votes
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Corus Premium Television Ltd.
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Class A common
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100
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100%
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Corus Premium Television Ltd.
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Second preferred
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36,000
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591991 B.C. Ltd. - Step 2
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Shareholder
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Class
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Number held
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% of votes
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Corus Premium Television Ltd.
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Class A common
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100
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100%
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Corus Premium Television Ltd.
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Second preferred
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14,000
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Corus Premium Television Ltd. - Step 2
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Shareholder
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Class
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Number held
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% of votes
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Corus Entertainment Inc.
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Class A
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1,001
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100%
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Corus Entertainment Inc.
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Preferred C
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1,000
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100%
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Corus Entertainment Inc.
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Preferred D
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10,000
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Corus Radio Company - Step 3
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Shareholder
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Class
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Number held
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% of votes
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Belcand Mount Royal Holdings Inc.
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Class B common
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1,000
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100%
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YTV Canada, Inc.
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Preferred
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39,000
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Belcand Mount Royal Holdings Inc. - Step 3
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Shareholder
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Class
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Number held
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% of votes
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Corus Entertainment Inc.
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Class B
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100
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100%
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YTV Canada, Inc.
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New class special preferred
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175,000
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Corus Audio & Advertising Services Ltd. - Step 4
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Shareholder
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Class
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Number held
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% of votes
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624723 B.C. Ltd.
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Class A common
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100
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100%
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624723 B.C. Ltd. - Step 4
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Shareholder
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Class
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Number held
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% of votes
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Corus Entertainment Inc.
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Class D common
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100
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100%
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YTV Canada, Inc.
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New class special preferred
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47,000
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591987 B.C. Ltd.
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New class special preferred
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50,000
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591989 B.C. Ltd.
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New class special preferred
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20,000
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SuperChannel Ltd.
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New class special preferred
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130,000
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3470644 Canada Inc. - Step 5
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Shareholder
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Class
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Number held
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% of votes
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1421711 Ontario Inc.
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Common
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101
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100%
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Corus Audio & Advertising Services Ltd.
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Preferred
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1,000
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1421711 Ontario Inc. - Step 5
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Shareholder
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Class
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Number held
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% of votes
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Corus Entertainment Inc.
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Class A common
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100
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100%
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CKIK-FM Limited
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New class special preferred
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80,000
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SuperChannel Ltd.
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New class special preferred
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70,000
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MovieMax! Ltd.
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New class special preferred
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10,000
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Corus Premium Television Ltd.
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New class special preferred
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240,000
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Lifestyle Television (1994) Limited
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New class special preferred
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115,000
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Date Modified: 2003-03-07
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