The proposed C$35bn (Eur21.25bn) takeover of Canadian telecoms firm BCE, which operates under the Bell Canada brand, collapsed Thursday after failing a solvency test.

Potential buyers, the Ontario Teachers’ Pension Plan and a group of US private equity firms, terminated the deal when accountant KPMG warned that the Canadian firm’s huge debt load would leave it insolvent.

The original deal was struck a good 18 months ago, in a more favourable economic climate and its failure to launch may cause some relief for the money lenders and the potential buyers.

Earlier this week, BCE warned that the transaction was unlikely to proceed as KPMG could not report a favourable opinion on the deal.