Cable & Wireless Communications (CWC) has recently acquired 51 per cent majority equity of the Bahamas Telecommunications Company (BTC). In a statement on Thursday, the Bahamas Government announced that it had signed a memorandum of understanding (MOU) with CWC PLc, UK, in connection with the sales of a 51 per cent interest in BTC. It said the MOU represented the outcome of extensive discussions between CWC and the Government over the last several months. It also stated that CWC and the Government would work together to finalise contractual terms and obtain necessary consents and other regulatory clearances, in order to complete the transaction in the first quarter of 2011.
However, CWC is expected to bring synergies to BTC in terms of procurement savings, administration savings, IT implementation and support, network operations support and others, the statement noted.
Under the MOU, it is proposed that CWC would acquire 51 per cent majority equity stake in BTC, including management control of the business for US$210 million plus stamp taxes. While the Government would 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. In addition, the Government may sell up to 9 per cent of the shares of BTC out of it remaining 49 per cent shareholding to the Bahamian public at any time, following competition of the transaction. But after three years, the Government may sell up to 25 per cent inclusive of shares sold in the first three years, among other proposals. The statement revealed that the Government also planned to amend the timeline for liberalisation of the mobile sector, so that the liberalisation would commence no sooner than three years after privatisation.
As a result of the privatisation of BTC and liberalisation of the cellular market, it is expected that consumers would benefit from the more affordable access to higher quality services across all regions of Bahamas, it added. It stated that a privatised BTC could be expected to continue a policy of out sourcing non-core functions, in an effort to support the large and growing small business community, which depended heavily on BTC. This, it said would provide a significant degree of new entrepreneurial opportunity available to Bahamians. It noted that CWC, is global, full service communications company is a global, has a successful track record through four regional units such as the Caribbean, Macau and Monaco Islands. It is the 49 per cent shareholder of TSTT, this country's national communications provider. It has also established a strong support for sports and community development, which have been enjoyed through BTC.