Mar 2015 Financial News

‘We’ll sell TSTT stake’

Mar 16, 2015

CABLE AND WIRELESS Communications (CWC) yesterday agreed to the Telecommunications Authority of TT (TATT)’s terms to first sell its 49 percent stake in TSTT before buying Columbus Communications, parent company of local cable TV and wireless services provider Flow.

However, the National Enterprises Ltd (NEL), which holds Government’s 51 percent majority shareholding in TSTT, the Telecommunications Services Company of TT, has told Newsday it is not interested in buying the minority stake.

This opens the way for either a foreign multinational to buy the minority shareholding en bloc, or for an IPO of TSTT for the general public to buy small allocations, according to government policy as to be set out by Finance Minister, Larry Howai.

Otherwise NEL said it is committed to working with CWC to plan for TSTT’s future, as the two shareholders are due to meet in Port-of-Spain next Monday.

However, TATT chairman Selby Wilson yesterday said the authority wants the telecommunications giant’s assurance of its plans for Columbus.

A TATT statement last Thursday said CWC can buy Columbus if it first sells its 49 percent stake in TSTT, and follows several procedures. Firstly, CWC must give TATT their written agreement for the divestment in consultation with NEL under the shareholders agreement.

Secondly to maintain competitiveness, this agreement must contain an undertaking by CWC to mitigate any loss of competitiveness in the sector due to the acquisition.

CWC will have limited access to TSTT’s documents, and agree that the change of control is not oppressive or unfairly prejudicial.

CWC must give TATT full written details of financial investment, sources of funds, projects and expansion plans for Columbus for five years plus their commitment to implementation. The complete divestment must occur within one year.

A CWC statement yesterday confirmed receipt of TATT’s conditional approval and thanked TATT for its rigour, courtesy and professionalism.

“CWC fully recognised that our shareholding in TSTT would need to be neutralised either by a blind trust or by disposal of our shares,” said CWC.

“We look forward to working with the majority shareholder, NEL, to agree a fair process for disposal, as embodied in our existing shareholder agreement, and are supportive of a disposal process that permits an orderly sale to be concluded in a period of not more than 18 months.” CWC said its TSTT shareholding should be attractive to a number of investors.

CWC said its has ambitious plans for Columbus and intends to make investments to roll out high speed broadband across the country.

“The company plans to build a new Data Centre to host the growing Business to Business (B2B) Managed Service offer, as well as expand its Network Operations Centre, and open a Technology Centre, creating additional jobs to the over 800 staff already employed.

“We look forward therefore to meeting the required conditions precedent shortly and receiving consent for the change of control in Flow T&T’s licences.” Wilson said TATT will only approve CWC’s bid when TATT gets its five-year business plan for developing Columbus.

“The sooner they produce it, is the sooner we can act. It’s entirely in their hands,” said Wilson.

He said he “had no idea” as to how CWC should dispose of its 49 percent stake in TSTT, but noted guidelines. “The shareholders agreement makes provision for NEL/Government to have the first right of refusal to purchase,” he said. “If they (NEL) don’t exercise it (the right to buy) then CWC has to find a buyer and seek approval from the Government.” Wilson said the TATT’s decisions are made with regard to maintaining a competitive environment in the telecom sector and to providing the general public with a good service.

NEL chairman Kenny Lu Chee Lip said yesterday’s turn of events was not a new thing to NEL which has been watching the situation for the past few months and has been awaiting TATT’s final position on its conditions to CWC.

Saying NEL is concerned with the continuing business of TSTT, he said NEL and CWC must now come

Source:
By SEAN DOUGLAS
Newsday
Saturday March 14 2015

http://www.newsday.co.tt/news/0,208273.html