The Central Bank of The Bahamas and the Public Utilities Commission have given the Canadian-based communications company, Persona Inc., the green light to purchase the Cable Bahamas shares held by Chairman Philip Keeping, the company’s majority shareholder.
Persona executives said yesterday they will pay Mr. Keeping $10 million for the controlling shares. He will also receive 2.8 million common shares of Persona making him the company’s single largest shareholder.
A source close to the deal said it will only strengthen the local cable company and Mr. Keeping will be “stepping up to a broader platform” in his acquisition of the Persona shares.
“Persona can do a lot more for Cable Bahamas than Keeping can do,” the source said. “Cable Bahamas is going to be big time.”
He added, “I think it is an interesting opportunity for Keeping. He can operate in a bigger way. I’m sure he is going to still be on the Cable Bahamas board. I would say it could be very much worth his while.”
Glenn Hill, Senior Vice President of Finance at Cable Bahamas, said today that the deal is significant because Persona has access to more capital markets that Cable Bahamas alone would not have.
Persona is the fifth largest publicly traded cable television provider in Canada.
“Cable Bahamas will be able to grow more and the value of the existing investment increased,” Mr. Hill said.
He said Mr. Keeping’s role in Cable Bahamas “remains to be seen.”
“It’s anticipated that he will remain on the board of directors and possibly on the board of Persona,” Mr. Hill said.
He pointed out that because Mr. Keeping will be the largest single shareholder of Persona, he will still have an important interest in Cable Bahamas.
President of Persona Brendan Paddick told the Bahama Journal that the deal will boost employment for the local company.
When Cable Bahamas was first granted its cable franchise, Mr. Paddick pointed out that it was estimated that the company would employ 75 full-time employees. Today it provides jobs for 217 workers. In the next two years, at least another 80 employees will be on staff, he said
“Persona believes there exists an opportunity to create career paths for high-skilled Bahamians in its expanded Caribbean opportunities, working in unison with the government and other stakeholders towards the common goal of positioning the Bahamas as the Caribbean leader in telecom, information technology and e-commerce,” Mr. Paddick said.
The acquisition of Mr. Keeping’s shares is viewed by Persona as an important step in the developing of its South American and Caribbean axis.
“We view Cable Bahamas with its technologically superior network, professional and skilled work force and strategic geographic location as the ideal beachhead for Persona’s expansion throughout the greater Caribbean region,” Mr. Paddick told the Journal. “We plan to fully market the Bahamas as a world class provider of broadband solutions, complemented by a country that boasts a host of superior professional services such as legal, accounting and financial advisors.
“In other words, a great place to do business.”
He said initially, the acquisition of the shares will have very little impact on the day-to-day operations of Cable Bahamas.
However, Mr. Paddick said, “Everyone in the Bahamas has a stake in Cable Bahamas future growth and success.”
Total basic subscribers have grown from 4,600 in June, 1995 to more than 55,100 in New Providence, Grand Bahama and 14 Family Islands as of June this year.
The closing of Mr. Keeping’s deal comes a little over a month after the Member of Parliament for Bamboo Town Tennyson Wells and the Member for St. Margaret accused him of being bankrupt when he first came to the Bahamas.
The independent MP’s referred to a “Dunn and Brad Street Report” on Mr. Keeping that reportedly showed that he was bankrupt when he came to the Bahamas with the business proposal to start the cable company.
Nonetheless, they said the government granted Mr. Keeping a license and allowed him to conduct a public offering that raised $30 million for Cable Bahamas.
The cable boss has since publicly denied those allegations.
Today, the company points out that it is a highly profitable organization with impressive growth potential.
Cable Bahamas’ revenue for the first six months of 2002 was $17.9 million, up by about 18 percent over the same period last year, according to company reports.
Net income for the first six months of this year was $3.6 million.
In addition to cable television services in New Providence, Grand Bahama and the Family Islands, the company’s Internet division, Coral Wave, provides service to more than 8,100 subscribers. This represents a 305 percent increase from the 2,000 customers it was serving a year ago.
Through Caribbean Crossings Limited, Cable Bahamas also operates a fibre optic cable system that provides a high-speed link between the Bahamas and Boca Raton, Florida.
