Bluewater litigation may dampen BTC interest

17 Jul 2009

The Bahamian government’s plans for the sale of a 51% stake in the Bahamas Telecommunications Company (BTC) could be negatively impacted by arbitration proceedings that are set to start in the United Kingdom in October. According to a lawyer representing Bluewater, which had unsuccessfully sought to buy a 49% stake in the telco, the sale process disregards the planned proceedings before the arbitrators in London. Philip ‘Brave’ Davis, who represents Bluewater, added: ‘I would suspect that potential suitors would no doubt have the possible outcome of these proceedings in mind when considering whether to participate [in the BTC privatisation]. A favourable outcome for my client in these arbitration proceedings could negatively impact the process.’

According to Davis, the current government led Bluewater to believe that it would have a ‘legitimate exercise’ to consummate the agreement it reached with the former Christie-led government. According to documents obtained by The Nassau Guardian, Bluewater agreed to pay the government USD260 million for 49% of the company, with USD220 million to be paid up front in cash, USD25 million after five years and USD15 million at the end of the sixth year. Under the deal, Bluewater would have been granted mobile and fixed line licences with five- and six-year exclusive periods respectively. ‘To have the rug pulled right from under them breached all their rights under the arrangements they arrived at with the government as the exclusivity agreement and the agreement that was later on met to sell provided for,’ Davis said. ‘We are seeking damages that are being quantified for the arbitration proceedings.’

Bahamas, Bahamas Telecommunications Company (BTC),

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