Unions disappointed in BTC deal
Both the Bahamas Communications and Public Officers Union(BCPOU)and the Bahamas Communications and Public Managers Union(BCPMU)yesterday expressed disappointment that the government has signed a Memorandum of Understanding(MOU)with Cable and Wireless Communications(CWC)for the purchase of 51 percent stake in the Bahamas Telecommunications Company(BTC).
BCPOU President Bernard Evans labeled the move a”bad deal”for The Bahamas.
“It is just disheartening. It is very disappointing and it is a bad Christmas present,”he said following a near two-hour long meeting with Prime Minister Hubert Ingraham at the Cabinet Office.
“This has transcended us now as BCPOU members. This is now a national issue. BTC is a national treasure and I can’t see why we can’t learn from the lessons of countries like Belize who have just nationalized their telephone company to make sure that their residents are the majority stakeholders in that company.
“I don’t see why we can’t do the same thing here. If you are going to sell you will want to sell the minority to a foreigner and not the majority.
“We are disappointed because we thought that CWC is not deserving of The Bahamas’jewel like BTC. But nevertheless we still are going to go full steam ahead in that we do not support CWC. We can’t wait for an opportunity to meet with them to find out what the government sees in them to see whether they have changed and what their plans are.
According to a statement released late yesterday, CWC and the government will work together to finalize contractual terms and obtain necessary consents and other regulatory clearances in order to complete the transaction in the first quarter of 2011.
Under the MOU, it is proposed that CWC will acquire a 51 percent majority equity stake in BTC, including management control of the business for US$210 million plus stamp taxes.
The government will also receive any excess net cash in BTC over and above US$15 million(calculated at completion), subject to a normal level of working capital being maintained in the company, and there will be a restructuring of the workforce of BTC following completion of the transaction, which will be carried out on an entirely voluntary basis.
It is intended that the voluntary workforce restructuring will be concluded by the first anniversary of completion. A detailed plan is in the process of being developed, among other things, according to the statement.
Evans said while the unions have been given a number of assurances, the track record of CWC leaves little to be desired.
“[The prime minister]reiterated that there would be no downsizing at least for the monopoly period of two years after the sale,”Evans said.
“That still will kind of take the majority of my people up to age 50 and so hopefully we will still try to get more out of it. We will see what happens and we still will continue to fight. But he told us in no uncertain terms that Cable and Wireless will then be at liberty to do as they wish.”
CWC had earlier proposed that 30 percent of the staff, over 300 employees, be axed from the company.
Last month, Ingraham disclosed that the government had hit a roadblock in its negotiations with Cable and Wireless regarding the sale of the telecommunications company.
“Cable and Wireless does want to fire 30 percent of the staff of BTC and the government is not prepared to do that,”he said at the time.
“We have told Cable and Wireless that we are prepared to have voluntary disengagement packages so that persons who want to retire early and who accept a package can of their own free will and accord do so. But we are not prepared to fire 30 percent of the staff of BTC.”
Evans said yesterday the unions were assured that Cable and Wireless will maximize Bahamian management within the company.
“We will see what that really means,”he said.
BCPMU President William Carroll expressed little confidence in the assurance that if CWC does anything counter-productive to the company, the government would step in.
“I am still disappointed to see a company[like]BTC go into foreign hands like CWC,”Carroll said.
Both union leaders said they plan to meet with their members today to discuss the way forward. There was no mention of whether there would be demonstrations or industrial action against the signing.
Recently, former Prime Minister Perry Christie said that the Progressive Liberal Party believed all along that Cable and Wireless was not the right company to acquire a majority stake in BTC.
“All through, prior governments said that Cable and Wireless was not the kind of company that we should sell to. It was just a given that it was not going to happen,”he said.
“We looked at the Caribbean, we looked at them, and it seemed to me that it was preferable to have a group come together of outstanding people who were in the communications industry that we were negotiating with than to have Cable and Wireless, because we thought we were going to have a Bahamian company[purchasing]49 percent as opposed to the 51 percent and doing so for$260 million. We thought it was a good deal to commend to the Bahamian people.”
According to the MOU, the government may sell up to nine percent of the shares of BTC out of its remaining 49 percent shareholding to the Bahamian public at any time following completion of the transaction. After three years, the government may sell up to 25 percent inclusive of shares sold in the first three years.