CWC sells Bermuda operation for$70 million
Cable and Wireless Communications(CWC)announced yesterday an agreement to sell Cable and Wireless Bermuda for$70 million in a$100 million on-market share buyback program.
The sale of the Bermuda operation was to The Bragg Group, who owns Bragg Communications, the largest privately-held communications and video services company in Canada. A CWC spokesman toldThe Guardianthat the Bermuda sale and the Bahamas Telecommunications Company(BTC)acquisition had no direct relationship to each other, and both plans had been in the works simultaneously for some time.
In a release from the company, Cable and Wireless Communications CEO Tony Rice said,”Today’s announcements, together with our signing of the agreement to acquire majority control of BTC earlier this month, represent the first steps in our reshaping of the group as outlined at the time of the demerger last year. Bermuda does not fit our business model as it is not a full-service operation, while BTC provides excellent opportunities and a strong strategic fit with our Caribbean business. The US$70 million consideration represents an excellent return on our long-term investment in Bermuda.”
The demerger Rice spoke of occurred on March 26, 2010, when Cable and Wireless Communications separated from Cable and Wireless Worldwide, after a 2009 decision by its board of directors that the two companies would be best positioned to deliver shareholder value as two separately-listed entities.
The Bermuda divestment is consistent with CWC’s strategy to reshape its portfolio and develop around full-service telecommunications operations in a series of core regional hubs, according to a release from the company. The consideration of US$70 million will be paid in cash by The Bragg Group and is subject to government and regulatory approvals. The deal is expected to be completed by the end of March.
Cable and Wireless Bermuda, which is part of CWC’s Monaco and Islands unit, is an international gateway business providing data capacity, carrier, internet and international direct dialling(IDD)calling services. Cable and Wireless Bermuda also provides data center and disaster recovery services to the corporate community, and partially owns a Bermudian alternative local network provider.
The Bragg Group is a leading Canadian-based cable and telecommunications provider, operating under the Eastlink brand.
CWC also owns stakes in two international cable systems which land in Bermuda that are operated separately and not part of the transaction.
Of the share repurchase program, Rice said that it is consistent with CWC’s policy to seek the best opportunities for increasing shareholder value with the group’s available cash resources.
“I am pleased that we are developing our portfolio management approach in tandem with our progress in developing the businesses,”Rice said.