The Bahamas Government signed a non-binding and closely guarded Memorandum of Understanding (MoU) with Cable and Wireless on December 2, 2010.
Highlights of the deal include:
- The sale of 51 per cent of the issued shares of BTC to Cable and Wireless.
- A purchase price of $210 million payable in full on completion of the transaction. Cable and Wireless will also be responsible for paying stamp duties up to $7 million in connection with the transaction.
- At the date of sale, BTC is expected to have a projected net cash value of $15 million. Net cash includes cash less financial debt. Excess cash in BTC’s balance sheet at completion, over $15 million, will go to CWC. This does not include special funds that are kept in a trust, as BTC is partially self-insured against catastrophic events.
- The $210 million purchase price is based on certain assumptions as to the implementation cost of the workforce restructuring.
- Restructuring of BTC’s workforce will be concluded by the first anniversary of CWC’s takeover. However, the restructuring will be done purely on a voluntary basis.
- Cable and Wireless will present a five-year business plan.
- Government has agreed to amend the Communications Act and the Sector Policy to stipulate that no external process, to the extent controlled (directly or indirectly) by the Government, for the granting of a second cellular licence could be launched prior to the third anniversary of completion of the sale; and that any third cellular licence would not be issued prior to the fifth anniversary of completion.
- BTC will become a major part of CWC’s overall regional operations and strategy, rather than an appendage of CWC’s existing regional operations; BTC will operate in a manner so as to improve and expand upon the existing communication services in The Bahamas; there will be substantial Bahamian participation in the management of BTC; and CWC must afford Bahamians meaningful opportunities to work within its regional operations.
- CWC will only be able to transfer its shares in the company, without the government’s prior consent, to an entity which is either an established telecommunications company with substantial operations, or a consortium in which such a telecommunications company has a substantial economic and operating interest.
- The Board of BTC would initially comprise 7 directors – 4 appointed by Cable & Wireless and 3 by the Government. CWC will have the right to appoint the Chairman and the Government will have the right to appoint the Deputy Chairman. As long as Government holds more than 15 per cent of the shares, it may appoint at least one Director.
- BTC will have an audit committee, and the board of BTC will establish processes, whether by nomination committee or remuneration committee, in respect to overseeing remuneration, benefits and recruitmemt of senior executives.
- The recruitment of BTC’s chief executive officer, chief operating officer and finance director shall be undertaken by Cable & Wireless and approved by the board of BTC.
- Although the day-to-day administration, operation and management of BTC will remain substantially in The Bahamas, certain aspects of the Company’s administration, operation and management will be provided through their One Caribbean operational model.
- In addition to significantly lowering the rates for mobile customers, CWC will introduce 3G services; increase the number of places providing telephone services; eliminate long distance charges for mobile to mobile; and introduce better roaming and easier connections for people traveling overseas
- BTC will aggressively expand its services and increase its revenue stream from the more than five million visitors coming to the Bahamas every year by both providing them with temporary services while in the country and by increasing the variety and volume of business between their systems and BTC services.
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