The government yesterday formalised its new deal with Cable and Wireless Communications (CWC) to reacquire two per cent of the Bahamas Telecommunications Company (BTC) – something Prime Minister Perry Christie said is a “win-win” for both sides and did not cost the Bahamian people “one single cent.”
“On the contrary, the government has been able to amicably secure the return in the economic majority stake in BTC without having to pay anything for it and I should add without having to make any deals to get it done either,” Prime Minister Christie said during a news conference Wednesday evening.
“In particular, there will be no extension of BTC’s monopoly as indicated before by me with the consent and approval of Cable and Wireless and no postponement of the liberalisation of the telecommunications sector again as agreed to and indicated by Cable and Wireless. Let us be clear about this then that we have not paid and will not have to pay for the re-acquirement of shares in any form or fashion. So in financial terms this is a win-win for the government and the people of The Bahamas.”
Under the new deal the government will now have 51 per cent of BTC.
This, Prime Minister Christie said, equates to over 5 million shares that were sold to C&W under the former Ingraham administration back in 2011 for $210 million.
Those shares will now be placed in a trust for the Bahamian people.
The shares that have been acquired are non-voting shares, which means that CWC still has managing control over BTC.
“In addition to these shares, which represent just two per cent of the total share equity in BTC, the new foundation will also hold all of the dividends and other income and all other economic benefits that will accrue from ownership of the shares,” Prime Minister Christie said.
“We confidently expect that annual dividends from the reacquired shares will be in the low seven-figure range based on historical performance. It is of particular importance to note that the income from the reacquired shares will not be going into the consolidated funds but instead will be separately held, used by the foundation so as to ensure that money will be used only for permitted purposes.”
Those purposes, Mr. Christie said, includes the improvement of residents’ access to telecommunication services throughout The Bahamas, the assistance and development of athletics and to assist in the fight against crime through CCTV and other technologies.
Additionally, BTC is expected to become a more collaborated partner with the Bahamas Broadcasting Corporation of The Bahamas (BCB) – a process that has already begun.
Mr. Christie said he is satisfied that the government has achieved the best possible deal for Bahamians.
CWC Chairman Phil Bentley said while he was not a part of the nearly two-year negotiation process, he called it an “historic occasion.”
He added that the British-based telecommunications company and the government have common goals.
“We have a shared vision to ensure that BTC is a key driver for economic growth and the development of this country’s communications and infrastructure. We both want BTC to be the world-class operator the Bahamian public deserves. BTC will continue to report its regular progress to government and the government will be represented on the board of directors and the prime minister and I will meet twice a year to discuss progress with the business,” he said.
“As the chairman of BTC I plan to appoint a Bahamian senior advisor to assist myself and the board in ensuring the company’s management to the good interest of the Bahamian people.”
Mr. Bentley said since CWC began its partnership with the government it has invested more than $140 million for the improvement of BTC’s services and the company intends to continue that venture with an investment of $150 million over the next three years.
“Service can always improve and that is something that we acknowledge with dropped calls on our mobile network. We are working very hard and I can tell you that [BTC CEO] Geoff Houston and the Bahamian team are very committed to ensuring that the service levels are the very best across the Caribbean,” he said.
The negotiating team, which was headed by businessman Franklyn Wilson, was appointed soon after the Progressive Liberal Party (PLP) won the general elections in 2012.
Mr. Wilson said the negotiations have always been cordial and very civil.
He added that this is a new beginning for The Bahamas.
“What has happened is we created a new BTC that has never existed before that is majority owned by the people of The Bahamas but at the same time is ran by the private sector and there is a lot of reason to believe that that is the truly best combination model that can accomplish a lot of good,” he said.
“We believe that we have developed a great deal of trust in Cable and Wireless and I go on record as saying that when this exercise started, there was a lot of talk and rumours on the impropriety of the people at Cable and Wireless. I want the world to know that our committee investigated all those rumours, we heard what you heard and we found no evidence of impropriety in respect to the conduct of Cable and Wireless in these matters.”
The negotiating team also included Sean McWeeney Q.C., former BTC President Leon Williams and financial advisor and National Insurance Board (NIB) Director, Rowena Bethel.
Prime Minister Christie said the deal will be laid in the House of Assembly and be made public thereafter.