Cable Bahamas is awaiting the formal end-of-year closing of the $332.5 million sale of its Summit Broadband operation in the United States, the company’s Chairman Franklyn Butler told Guardian Business yesterday, adding that the sale will allow the company to restart dividend payments.
Butler broke the good news to shareholders on Wednesday night at Cable Bahamas’ annual general meeting. He said he could not yet say what share yields and cash windfall the Summit sale would bring.
Butler said the first step will be to recapitalize the company’s debt sheets and put a dent in some of its loan balances.
“It (sale of Summit) is important for us to give ourselves a little bit of flexibility,” he said. “The sale of Summit will create a big net gain.”
Butler added that with the economic risks growing in the United States given the trade war with China, it was important for Cable Bahamas to strategically manage its risk.
“We don’t want to be left in a downward cycle,” he said. “Foreign assets need more capital.”
He said the sale was a positive gain given that fiber assets go for a premium.
According to Butler, Cable Bahamas shareholders were happy to hear that Aliv showed positive growth in its third year and is on track to be EBITDA (earnings before interest, tax, depreciation and amortization) positive by 2020.
“Aliv continues to grow,” Butler said. “If it wasn’t for the storm (Hurricane Dorian) we would have been EBITDA-positive.”
Chief Aliv Officer Damian Blackburn announced this week that Aliv hit 170,000 subscribers in its third year in operation and currently holds an estimated 37 percent of the mobile market.