Sep 2014 Financial News

TSTT’s acting CEO resigns

Sep 18, 2014

Acting chief executive of majority state-owned TSTT, George Hill, has tendered his resignation to the board, amid reports that some of the telecommunication provider’s local directors want to replace him with Digicel’s former country manager in Tobago. Hill has acted as TSTT’s top executive since he replaced Dianna De Sousa, whose substantive position was executive vice president, in December 2012. 

He is the third TSTT executive to resign from the company’s hot seat in two-and-a-half years, as the company’s last substantive CEO was Roberto Peon, who resigned in March 2012. Under Hill, TSTT’s management came up with a five-year plan—which got the board’s greenlight in October 2013—that calls for $4.3 billion in capital and operational expenditure between 2013 and 2018. About $1.8 billion of the $4.3 billion expenditure is being raised by TSTT from a bond, which is in the final stages of being issued. 

The T&T Guardian could not glean how investors and potential investors in the bond would react to the turmoil at the top of TSTT. About 15 per cent of the total expenditure in the five-year period has been assigned to fund voluntary separation and early retirement for just over 600 TSTT employees.

TSTT declared a net loss of $505.9 million for the year ended March 31, 2014, as most of expenses of the separation exercise were taken in the first year of the five-year plan, which was from April 1 2013 to March 31, 2014. TSTT’s 2013/2014 results included a provision for re-organisation costs of $694.6 million which is expected to be a non-recurring provision. 

In an interview with the Business Guardian in June, Hill said: “When we look at what we are trying to achieve based on our strategic plan, we took a decision to absorb the exceptional one-off costs in the first year which resulted in the loss, with the understanding that if we stayed on plan, we will begin to see tangible operational and financial improvements from year two of the plan.”

The plan is for the company to return to profitability by the end of its 2014/2015 financial year. The man touted to replace Hill is Garvin Medera, an electrical engineer, who worked at Digicel from November 2007 to June 2013. TSTT sources said Medera has the strong support of at least two of the company’s local directors and is in the second year of an MBA degree at an English university. The TSTT board is expected to discuss Hill’s resignation and plans for his replacement at a teleconference tomorrow.

TSTT is 51 per cent owned by National Enterprises Ltd, whose annual meeting is today, and 49 per cent owned by Cable and Wireless Communications (CWC). In a statement this week, CWC said that it was “deeply committed to investing in T&T and wishes to retain a meaningful presence in this market.” But the English company said that it was looking for the right vehicle to invest its additional capital sources in T&T.

“We can do this either through a comprehensive business remodelling of TSTT, or as a substantial third mobile operator,” according to CWC.

Source:
Anthony Wilson
Trinidad Guardian
Thursday September 18, 2014

http://www.guardian.co.tt/news/2014-09-18/tstt%E2%80%99s-acting-ceo-resigns