Govt under pressure on delayed ‘2% deal’

19 Jun 2014

The Bahamian government and Cable and Wireless Communications (CWC) are hoping to finalise their ‘2% deal’ by 3 July, the Tribune writes, citing Franklyn Wilson, a senior government official and lead negotiator for the pact. The government has sought to clarify the situation after CWC published its financial results, showing 51% ownership of Bahamas Telecommunication Company (BTC). Wilson dismissed accusations that the government had lied about the deal, explaining that CWC and the Bahamian government have signed a Memorandum of Understanding (MoU) but have yet to conclude the deal. Pressed by the paper on the issue, the official was unable to explain why CWC’s auditors had failed to include the MoU as a subsequent event. Under the agreement, CWC will cede control of 5,093,200 non-voting shares in BTC – representing just under 2% of the company’s shareholding – to a charitable trust, the BTC Foundation, which will invest in Bahamian interests. The deal is a ‘face-saving’ compromise that will allow the government to claim that it has fulfilled one of its election promises by returning majority control of the telco to Bahamians, whilst CWC retains full management control of the operator and remains the largest single shareholder, allowing it to consolidate BTC’s financial results.

Wilson clarified: ‘The Government and CWC have entered into a MoU where the majority economic interest is to be returned to the people of the Commonwealth of the Bahamas once the definitive agreement is executed… Both sides hoped to conclude a definitive agreement by the end of March to coincide with the financial year-end for CWC, but that did not happen despite valiant efforts. Both sides are hopeful that when [CWC chief executive Phil Bentley] comes back by 3 July, everything will be ready for execution and, at that point, everything announced in the MoU will come to fruition. Why the auditors did not include that as a subsequent event of note, I have no idea.’

Bahamas, Bahamas Telecommunications Company (BTC),

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