'Don't be tempted' on BTC buy-out proposal

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamas Telecommunications Company (BTC) union leader last night urged the government “not to be tempted” by any Liberty Latin America offer to acquire its stake in the company.

Dino Rolle, the Bahamas Communications and Public Officers Union’s (BCPOU) president, told Tribune Business that he “strongly suspects” that the Liberty “investment proposal” presented to the prime minister last week was a “pitch” to purchase all or some of the government’s 49 percent BTC stake.

He revealed that the proposal’s submission was confirmed directly to him by Inge Smidts, chief executive of Cable & Wireless Communications (CWC), the Liberty affiliate that directly holds Board and management control at BTC.

While conceding that Ms Smidts was vague about the nature of this “investment proposal”, Mr Rolle then disclosed that she informed him Dr Hubert Minnis said he would “consider” Liberty’s offer if the regional communications giant agreed not to move BTC’s call centre to Guyana.

The BCPOU leader expressed outrage to Tribune Business that the Prime Minister was seemingly using BTC’s call centre, and the jobs bound up with it, as “a bargaining chip” given that CWC’s 2011 privatisation deal with the government agreed that the facility would remain in The Bahamas.

He added that he was “strongly and firmly” opposed to Liberty/CWC acquiring all or more of BTC on the basis that it had yet to deliver on many privatisation promises, and voiced fears that expatriate workers would increasingly be brought in to take Bahamian jobs if this were to occur.

“I was told that’s something they [Liberty/CWC] are interested in several weeks ago before I heard anything of the date of their meeting with the Government and extent of how they would travel here in great numbers,” Mr Rolle told Tribune Business.

“On the same day that they met with the government I met with Inge, CWC’s chief executive for the region, at Baha Mar’s SLS resort. She indicated immediately about an investment proposal they had pitched to the government earlier in the day.”

Mr Rolle said Ms Smidts spoke in general terms, and provided no details, but he “strongly suspects” this was an offer by Liberty/CWC to acquire all or some of the government’s 49 percent equity stake in BTC.

“She was ambiguous,” he added. “She spoke in broad terms about this investment proposal. She didn’t say what it was... But Inge Smidts did say he [Dr Minnis] would consider their proposal if they consider leaving the contact centre here.”

The Prime Minister, addressing Parliament yesterday on the controversy caused by Balan Nair, Liberty’s chief executive, in his criticisms of BTC workers productivity and attitude, confirmed that plans to move the call centre from The Bahamas to Guyana were discussed at last meeting.

“I informed them that the government would not tolerate the removal of the call centre from Nassau to Guyana because I found it very insulting,” Dr Minnis said. “I was very firm that we would not tolerate Bahamians losing jobs. I would not tolerate that.

“The Government was (also) very upset with information that we are receiving that senior officials within BTC are being replaced for a foreign entity. That is most concerning and there was some rumour that individuals were being cherry-picked and that is not done in the Bahamas.”

He declined, though, to go into further details about the meeting with Mr Nair and other Liberty executives, prompting Mr Rolle to warn the Government against any thought of selling its BTC equity interest to raise much-needed funds for the cash-strapped Public Treasury.

“I warn the Government not to be tempted with that,” he told Tribune Business. “It’s low-hanging fruit, but I think we can do better to consider what was proposed at the time of BTC’s sale, which was to sell shares to the Bahamian people.”

The Government’s equity stakes in BTC and Aliv, where it holds a 51.75 percent majority interest, represent two assets that would likely take the least time to dispose of in raising instant cash. The Minnis administration, though, has publicly said it will not dispose of its Aliv interest until the mobile operator reaches profitability, and that is likely still a year or two away.

The former Ingraham administration proposed selling down the Government’s BTC stake in tranches that the Bahamian capital markets can absorb, but there has been no indication of what the current incumbent plans to do.

While CWC paid $210m (later reduced to $206m) for a then-51 percent majority stake in 2011, the value of its shareholding will likely have significantly diminished since then due to Aliv’s arrival and the end to its mobile monopoly, potentially cutting its worth to somewhere between $100m to $150m.

That still represents a potentially-significant cash infusion for the Public Treasury, and Liberty’s proposal could have been designed to capitalise on the Government’s fiscal weakness. The CWC and BTC owner has already shown it is uncomfortable holding minority stakes with governments as partners, its conference calls having recently flagged up its issues in Trinidad.

Still, the term “investment proposal” has a variety of meanings, and Mr Nair’s letter to the Prime Minister yesterday referred to discussions about “investing in improving our networks across the region, and we will certainly look at The Bahamas as one of those markets to enhance and extend our network”.

Mr Rolle, while conceding that the Prime Minister’s comments on the “call centre” represented a slightly different take on what he was told by Ms Smidts, said he was “strongly and absolutely” opposed to Liberty/CWC increasing its BTC ownership.

“I stand firmly against that,” he told Tribune Business. “Liberty hasn’t proven itself in the current agreement. The same group of persons has yet to live up to their terms of the sales agreement.

“I was offended that the Prime Minister was negotiating over the call centre, which is not a chip according to the sales agreement. The contact centre was supposed to be a centre of excellence for the region and remain here in The Bahamas.

“It is a non-bargaining chip and should not be in the negotiations. I honestly could not see how the Prime Minister could use the contact centre as a bargaining tool.”

Mr Rolle added that the new “industrial agreement” between the BCPOU and BTC, which has been much touted in recent weeks, is only an “agreement in principle” that has not been signed off since talks ended on April 30. He added that the new deal is largely retroactive, since it will expire on April 1, 2020.

Comments

Well_mudda_take_sic says...

Here's where the Bahamian people find out just how fluckin' stupid Minnis and Turnquest really are. Can you imagine these two bozos, Minnis and Turnquest, allowing themselves to be goaded by Nair, Sinclair and others, including BTC's union leaders, into buying back from Liberty/CWC the 49% loss making share of BTC that was sold only a few years ago by the Bahamian government after great cost was incurred by Bahamian taxpayers in readying it for sale to Lime/CWC???!!! THIS HAS TO BE THE JOKE OF THE CENTURY!

Posted 18 July 2019, 3:30 p.m. Suggest removal

concernedcitizen says...

Actually this article , if it is true , is about Liberty buying the rest of BTC , not us buying it back .I realize you don,t like Minnis or Turnquest but our slide to the bottom did not start in the last three years , we have been unable to keep the lights on since the late 1970,s .You keep going on about quality canidates ,,this is us ,,they did not come from mars ..Pick fifty upper level Bahamians and you will get the same level of corruption , at least under the FNM we get things , airport redone , roads , harbor dredge , post office,,the biggest project the PLP did from 2012 to 2017 was about 500 million walking out the front door of BOB ,,oh yeah and a 20 million dollar a year carnival w a Trini headliner

Posted 18 July 2019, 5:47 p.m. Suggest removal

Well_mudda_take_sic says...

No, you've got it all wrong..... Liberty/CWC would like to make Minnis and Turnquest think they want to acquire the rest of BTC still owned by the Bahamian government. But truth be told, Liberty/CWC want to sell their 49% stake back to the Bahamian government because they've finally come to the realisation that BTC will always be a loss making investment for them....and they realize Minnis and Turnquest are stupid enough to be conned into paying a fortune to get back the 49% so they can then proceed to quadruple the current headcount at BTC with their FNM party faithful favourites.

Posted 19 July 2019, 10:43 a.m. Suggest removal

DDK says...

You could be right, Mudda! Devious business ethics are the norm these days. Just look at the Orange One!

Posted 19 July 2019, 3:17 p.m. Suggest removal

tom1912 says...

It would seem BTC and its owners w.r.t wanting to use call centres outside the Bahamas are clearly aming to save money at customer's service experience. I'm not sure but isn't Cable and Wireless, [ Once a wholly own U.K. governemt company before Thatcher], now owned by well know Chinese Telcoms company.:-)
It would have been better if the Bahamian Government had held the Golden share (51%)
alas it wasn't the case :-(

My understanding it is always good to learn by others mistakes, I can only talk from a personal UK direct experience although being aware of what has happening in the rest of the world from friends and relatives that there has been a customer backlash against out of country call centres such that untility,banks and insurance companies are now using the fact that they have incountry call centres as a sales pitch!

Slightly off topic but I notice PPI has raised it's head in this country, this is a means of Governments of the day to get capital project costs off their books and mortgaging the children, grand children ad infinitum of the citizens. It does not work.
Bahamas please learn from others mistakes.

Posted 19 July 2019, 10:14 a.m. Suggest removal

DDK says...

All in all, should it not be considered a conflict of interest for Government to hold majority shares in two competing business entities? Recipe for failure.

The above post regarding the Government's new found preference for PPI's is spot on. They always look for the easy way out of the results their incompetence and pilfering. Case in point - their abject failure to implement a national lottery for the benefit of service to and infrastructure for The People. BEC is another glaring example........

Posted 19 July 2019, 3:13 p.m. Suggest removal

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