$210M for BTC sale
Cable and Wireless Communications(CWC)is one step closer to owning a 51 percent share in Bahamas Telecommunications Company(BTC)at a cost of$210 million, the government announced yesterday, revealing that it has signed a Memorandum of Understanding(MOU)with the international telecommunications giant.
The UK-based CWC and the Government of the Bahamas will finalize their contractual terms in the first quarter of 2011, according to the government release. This comes 13 years after the discussion to privatize the company began.
It was thought that government and CWC may have reached an impasse two weeks ago after Prime Minster Hubert Ingraham announced that he would not allow the company to downsize its staff by 30 percent if it acquired BTC.
Instead, Ingraham said he would seek to have offered to the staff voluntary separation packages.
“If they are able to come to terms with that, then we’ll continue to do the deal. If they are not, then the deal will be off,”Ingraham said at the time.
Under the terms of the MOU, BTC’s workforce restructuring will be on a voluntary basis.
“It is intended that the voluntary workforce restructuring will be concluded by the first anniversary of completion,”said the release.”A detailed plan is in the process of being developed.”
The government also ensured, within the terms of the MOU, that Bahamians will have the ability to engage in”meaningful”employment opportunities within CWC’s regional operations and that there remains a significant managerial presence in BTC following the completion of the sale.
“It is expected that being part of a telecoms group such as CWC will create a variety of opportunities for Bahamians to succeed in a global organization,”the release said.
“Measures have been taken to ensure that the pension entitlements of existing employees and retirees of BTC are not affected by the transaction.”
The Progressive Liberal Party recently railed against the sale price of the local telecommunications company. According to party officials, they left a sale price for 49 percent of BTC at$260 million.
The government reached a deal to sell BTC to CWC for$210 million plus”any excess net cash in BTC over and above US$15 million”, which will be calculated at the completion of the deal and dependent upon the level of working capital being maintained in BTC.
The release added that the government changed the timeline for liberalization of the cellular sector to no sooner than three years after BTC is privatized.
“As a result of the privatization of BTC and liberalization of the cellular market, it is expected that consumers will benefit from more affordable access to higher quality services across all regions of The Bahamas,”said the release.
“As a result of improved communications services, The Bahamas is also likely to become more competitive as a business and tourism destination.”
The government also assured that non-core functions at BTC will continue to be provided by local small business.
“It is expected that there will be a significant degree of new entrepreneurial opportunity available to Bahamians as a result of the privatization of BTC, and liberalization of the market.”
Unions representing the Bahamas Telecommunications Company(BTC)workers said recently that they wanted the BTC deal with CWC to die.
They expressed disappointment yesterday that the government intends to finalize a sale to CWC.
CWC is one of the largest telecommunications operators in the region and competes head to head with Digicel.