Cable & Wireless Communications plc (“CWC”) today announces that it has signed a non-binding memorandum of understanding (“MOU”) with the Government of the Commonwealth of The Bahamas (“Government”) to acquire a 51% interest in the Bahamas Telecommunications Company (“BTC”).
CWC and the Government will now work together to complete due diligence, finalise contractual terms and obtain necessary consents and other regulatory clearances with the aim of completing the transaction in the first quarter of 2011.
BTC is strongly complementary to CWC’s Caribbean business, LIME, which is the leading full-service telecommunications provider in the region.
Under the MOU, it is proposed that:
– CWC will acquire the majority equity stake in BTC, including management control of the business, for US$210 million.
– BTC will enter into agreements with CWC for the provision, on an ongoing basis, of various support services, branding and use of intellectual property.
– The liberalisation process for the mobile sector will commence no sooner than three years after completion of the transaction.
– CWC will work with the Government and the management of BTC to develop a business plan for BTC, addressing its plans for the modernisation of telecommunications throughout The Bahamas and for the development of BTC following privatisation.
Tony Rice, CWC’s Chief Executive, commented:
“We are pleased to take this important step in the process to invest in The Bahamas, a dynamic economy and market with good potential. BTC represents a great opportunity to expand our business in a region where we have competitive strength and management capability. This opportunity would fit with our strategy to develop the CWC business through market leading and cash generative businesses. In partnering with the Government of the Commonwealth of The Bahamas we believe that we can deliver a world-class telecoms capability to the people and businesses of The Bahamas and deliver significant operational improvements to BTC. Our immediate focus is now on finalising terms and completing this transaction.”
