Bluewater Unveiled
By CANDIA DAMES
NG News Editor
candia@nasguard.com
A look at the BTC deal that almost was
The veil of secrecy surrounding the group that almost purchased 49 percent of the Bahamas Telecommunications Company (BTC) under the Christie administration is being lifted.
According to a closely guarded document obtained by National Review, Bluewater is a privately held entity, which does not have audited statements or disclose financial statements publicly.
“However, at signing or immediately prior to signing the [letter of intent] we are prepared to disclose relevant financial information and give the relevant assurances on Bluewater’s acquisition vehicle, including its financial capacity to complete the transaction,” the company said in 2006.
The response came as part of the due diligence exercise carried out by the Privatization Committee under the Christie administration, which subsequently recommended to the government that negotiations should proceed with Bluewater.
Members of that committee included the financial secretary, the legal advisor to the Ministry of Finance, BTC union officials, private sector members and telecommunications consultants.
As the government gets closer to closing a deal with Cable and Wireless Communications (CWC) to sell 51 percent of BTC, the Bluewater deal that almost came to be remains highly controversial.
Speaking at his party’s rally on Clifford Park Saturday night, Prime Minister Hubert Ingraham said if the Progressive Liberal Party (PLP) had its way BTC would have been sold off to Bluewater, which “had no experience in telecommunications. The company wasn’t even traded on the stock market.”
Ingraham said, “We still aren’t exactly sure who had their hands in that Bluewater pot or who the real players were behind a deal that would have purchased BTC on credit…”
Details of the deal that almost came to be are likely to be discussed in greater details in the BTC privatization debate, which gets underway in the House of Assembly today.
Ingraham has already promised to have more to say about Bluewater and what the Christie administration had planned.
In 2006, the privatization committee posed a number of questions to Bluewater, which were answered in detailed form in a document to the committee dated September 13, 2006.
One revelation made in that document is that Bluewater was formed to invest in and manage companies in the telecom and media industries.
According to the document, there was no plan for any layoffs. Between 2006 and 2011, average salary at BTC was projected to rise from $43,332 to $48,780.
Bluewater said in 2006 it would negotiate contracts with the existing management team between signing the letter of intent and closing the transaction.
“We anticipate that as a part of their package executive management will receive equity participation in BTC,” Bluewater said.
“Bluewater also anticipates that all board members will receive industry standard board compensation packages.”
A PLAN FOR BTC
Bluewater outlined 25 key initiatives to target in the first two years of purchasing the BTC shares.
It committed to plugging revenue leakages; reducing discounts to prepaid vendors; reducing bad debt charges; charging for in-home wiring to recoup costs; tightening the pre-paid card distribution process; instituting a new sales incentive scheme; reducing fleet maintenance costs; reducing overtime expenses and reducing contract service costs by 20 percent.
The company said that in the first year of the BTC acquisition it expected $92.5 million to be spent in capital expenditure to focus on consumers and core networks.
Asked to provide the supporting details and data for Bluewater’s proposed debt to equity ratio and any plans for external financing, Bluewater said it “does not intend to leverage BTC, so the net debt to equity ratio does not change during our projections.”
It also said it expected “all free cash flow after capital expenditure to be dividended to shareholders. This excludes current cash on the balance sheet which will be left at the company for working capital purposes.”
Bluewater also advised that it expected the cost of management and consultant contracts to be covered by the employee costs and the consultant costs in the business plan.
“In addition, we anticipate setting aside 10 percent of the equity of BTC for employees,” said Bluewater in 2006.
Under current plans for BTC, which appear poised to go through, the government says it will, by the end of this year, sell nine percent or approximately $40 million of the shares in BTC to the Bahamian public.
Bluewater said in 2006 that it did not intend to transfer or sell any of BTC’s shares for three years or any longer period of time as agreed by the shareholders.
The Bluewater plan also called for an improvement of EBITDA margins from 26 percent in 2005 to 39 percent in 2008.
The company said the improvement in EBITDA would have been achieved through the streamlining of operations.
The 2006 document to the Privatization Committee added, “Bluewater also intends to offer better value to its customers through reductions in wireless and international long distance tariffs as laid out in our business plan.”
The company had planned to launch an IPTV offering in 2009.
This would have included more than 1,000 movies on-demand “available to watch exactly when you want”; interactive music channels; on-demand movies and TV that you can stop, rewind, pause or fast-forward.
IPTV revenues were projected to be more than $9 million by this year.
The deal that came close to reality also included a plan for improving telecommunication services on less developed Family Islands.
THE BLUEWATER PLAYERS
The Privatization Committee asked Bluewater to provide the propose management candidates for BTC.
Several board members were named.
One of them was Trinidad and Tobago native Roger Ames, who served as chairman and chief executive officer of Warner Music Group and president of Warner Music International between August 1999 and August 2004.
Carlos Espinal who in 2006 was CEO of TSTT, the national telephone company of Trinidad & Tobago, was named as another Bluewater executive.
Prior to joining TSTT in 2004, he spent eight years with Verizon as senior vice president international - Latin America.
During his time with Verizon, he worked as a turn-around specialist for Verizon’s Latin American and Caribbean businesses, Bluewater said.
John Gregg was listed in the document sent to the Privatization Committee as managing director of Bluewater. According to that 2006 document, he had 15 years of building companies in the media and telecom industry in Europe, the U.S. and Asia.
Another board member named was Andrew Sukawaty, who was named as the chairman and CEO of Inmarsat, which Bluewater said was the world leader in global satellite communications.
According to the document, Sukawaty served as president and CEO of Sprint PCS, one of America’s largest mobile phone providers. It said he grew Sprint from a start up to a company with 9.5 million subscribers and approximately $6.6 billion in revenue.
Bluewater also named several operational advisors, a finance team and a legal team.
The document said Bluewater’s principals intended to invest in BTC through a standalone Bahamian entity that would have been capitalized and controlled by Bluewater’s principals. It said Bluewater is an entity controlled by John Gregg.
DEFENDING THE DEAL
Today, Bluewater of course is a dead deal, but what the Christie administration had proposed continues to come up in the current privatization debate.
The Christie administration had agreed to sell a 49 percent stake in the national telecommunications provider for $260 million shortly before the May 2007 general election.
However, after the Free National Movement was returned to power, Ingraham vowed to review the deal, claiming that Christie and the former Cabinet were planning to sell BTC "on credit" and that Bluewater would enjoy too lengthy an exclusivity period as a monopoly in an industry that his administration was keen on liberalizing.
According to documents previously obtained by The Nassau Guardian, Bluewater had agreed to pay $220 million for BTC in cash at closing, $25 million at the end of the fifth year following closing and $15 million at the end of the sixth year.
Under the deal, Bluewater would have been granted mobile and landline licenses with five and six-year exclusive periods, respectively.
Speaking at a press conference at PLP headquarters on Farrington Road yesterday, Christie again defended the deal.
“By innuendos and suggestions he (Ingraham) started off immediately after he became prime minister to suggest that there was something crooked about our involvement in Bluewater,” Christie said.
“The Progressive Liberal Party structured an approach to privatization that relied on the integrity and leadership of the financial secretary (at the time) Mrs. Ruth Millar.
“To ensure that we were on safe grounds we placed the leaders of the management union of BTC and the workers, BCPOU (Bahamas Communications and Public Officers Union), as full members of the negotiating team.
“That team, including the union leaders, would come into Cabinet and brief Cabinet. We took a transparent and accountable approach to it.”
Referring to the prime minister, Christie said, “…If he really wants to look for something, tell the Bahamian people whether or not there are deals in this BTC sale to Cable and Wireless.
“That’s where he should be looking at. The Progressive Liberal Party lost the elections. We can explain the positions we took.”
3/21/2011
thenassauguardian
A political blog about Bahamian politics in The Bahamas, Bahamian Politicans - and the entire Bahamas political lot. Bahamian Blogger Dennis Dames keeps you updated on the political news and views throughout the islands of The Bahamas without fear or favor. Bahamian Politicians and the Bahamian Political Arena: Updates one Post at a time on Bahamas Politics and Bahamas Politicans; and their local, regional and international policies and perspectives.
Showing posts with label Bluewater Bahamas. Show all posts
Showing posts with label Bluewater Bahamas. Show all posts
Monday, March 21, 2011
Friday, December 17, 2010
...the Christie government's secret negotiations with Bluewater...
Bahamians being offered better deal
tribune242 editoial
WE ARE baffled by Opposition Leader Perry Christie's harping on the "secrecy" surrounding government's memorandum of understanding with Cable & Wireless (LIME). Surprised because on the desk in front of us is a file of the Christie government's secret negotiations with Bluewater that were then too sensitive to be shared with the public and of which no one knew the details until the Ingraham government came to office and opened the books. The union, by its own and Mr Christie's admission, was a part of the negotiations and approved the sale.
A week before the election, which resulted in the Christie government's removal from office, it was discovered that the privatisation committee for the Bluewater sale had submitted its report, which was approved by cabinet, but not signed by Mr Christie.
Today the public knows more about the Cable and Wireless proposal than it ever did about the Bluewater deal -- and even now information is coming out about Bluewater that the public is hearing for the first time.
Prime Minister Ingraham has promised that all information on the BTC sale with all documents attached will be made public two weeks before being presented to the House for a vote.
This full disclosure, we can assure our readers -- judging from the PLP's track record, especially recalling the "secret" land-giveaway in the Baha Mar Cable Beach deal -- would have never happened under the Christie government.
And so why does Mr Christie continue to harp on a deal being "clandestinely" dealt with "deep in secret" when there is nothing secret about it?
He believes government, avoided parliament yesterday morning, because it is afraid of the issue.
"They know that they are riding a tiger and you know old Confucius' saying: 'He who ride rides tiger dare not fall off,'" said Mr Christie.
We know that Confucius was a wise man, but this particular saying cannot be attributed to him. It is an ancient Chinese proverb, which says: "He who rides a tiger can never get off or the tiger will devour him."
Is this why Mr Christie cannot give up the secrecy myth? Maybe, he and the union representatives, who admit they were a part of the whole Bluewater negotiations, should come clean and tell the public why they were so secret when they were trying to hand over the Bahamian people's "jewel" to a group that had not been tested and had no track record in communications? No, Mr Christie, this is one tiger you will have to keep riding because if you fall off the people will indeed see that the Emperor has no clothes.
In yesterday's demonstration when a union member broke through the restraining barriers on Bay Street and was confronted by police, he taunted his colleagues, who remained behind the barricades: "They have y'all corralled like a bunch of animals. That is how they have you. Y'all look like a bunch of animals!"
Not only did they look like a bunch of corralled animals, but they were behaving as such without an independent brain in their heads. Imagine mounting a demonstration on the emotional hot air of politicians and union leaders without accepting the invitation to sit down with Cable and Wireless to discover for themselves what the negotiations are all about and the important role Bahamians are to play in it.
Today they now have a chance to sit down in the quiet of their homes and read the Cabinet's statement on page 7 of today's edition and see the bill of goods that the PLP was trying to sell them -- and if it were not for the election would have got away with -- and what they are being offered today.
This week a union leader accused government of giving away the country's cash cow. Indeed it is a cash cow that consumers are paying for dearly and unionists are milking without shame.
The backwardness of BTC has retarded the growth of this country's financial industry as well as local businesses that have been forced -- thanks to the computer -- to try to avoid the BTC monopoly as far as possible.
All we have heard so far is what the unionists want of BTC. It is now time for the consumers to be heard. Consumers want lower prices, better service and an ability to enter the world market without being hemmed in by suffocating monopolies.
Read the Cabinet statement and understand how Bahamians are being hoodwinked by politicians -- there is indeed no comparison with the Christie-backed Bluewater deal to what is being offered today by Cable and Wireless Communications.
December 16, 2010
tribune242 editoial
tribune242 editoial
WE ARE baffled by Opposition Leader Perry Christie's harping on the "secrecy" surrounding government's memorandum of understanding with Cable & Wireless (LIME). Surprised because on the desk in front of us is a file of the Christie government's secret negotiations with Bluewater that were then too sensitive to be shared with the public and of which no one knew the details until the Ingraham government came to office and opened the books. The union, by its own and Mr Christie's admission, was a part of the negotiations and approved the sale.
A week before the election, which resulted in the Christie government's removal from office, it was discovered that the privatisation committee for the Bluewater sale had submitted its report, which was approved by cabinet, but not signed by Mr Christie.
Today the public knows more about the Cable and Wireless proposal than it ever did about the Bluewater deal -- and even now information is coming out about Bluewater that the public is hearing for the first time.
Prime Minister Ingraham has promised that all information on the BTC sale with all documents attached will be made public two weeks before being presented to the House for a vote.
This full disclosure, we can assure our readers -- judging from the PLP's track record, especially recalling the "secret" land-giveaway in the Baha Mar Cable Beach deal -- would have never happened under the Christie government.
And so why does Mr Christie continue to harp on a deal being "clandestinely" dealt with "deep in secret" when there is nothing secret about it?
He believes government, avoided parliament yesterday morning, because it is afraid of the issue.
"They know that they are riding a tiger and you know old Confucius' saying: 'He who ride rides tiger dare not fall off,'" said Mr Christie.
We know that Confucius was a wise man, but this particular saying cannot be attributed to him. It is an ancient Chinese proverb, which says: "He who rides a tiger can never get off or the tiger will devour him."
Is this why Mr Christie cannot give up the secrecy myth? Maybe, he and the union representatives, who admit they were a part of the whole Bluewater negotiations, should come clean and tell the public why they were so secret when they were trying to hand over the Bahamian people's "jewel" to a group that had not been tested and had no track record in communications? No, Mr Christie, this is one tiger you will have to keep riding because if you fall off the people will indeed see that the Emperor has no clothes.
In yesterday's demonstration when a union member broke through the restraining barriers on Bay Street and was confronted by police, he taunted his colleagues, who remained behind the barricades: "They have y'all corralled like a bunch of animals. That is how they have you. Y'all look like a bunch of animals!"
Not only did they look like a bunch of corralled animals, but they were behaving as such without an independent brain in their heads. Imagine mounting a demonstration on the emotional hot air of politicians and union leaders without accepting the invitation to sit down with Cable and Wireless to discover for themselves what the negotiations are all about and the important role Bahamians are to play in it.
Today they now have a chance to sit down in the quiet of their homes and read the Cabinet's statement on page 7 of today's edition and see the bill of goods that the PLP was trying to sell them -- and if it were not for the election would have got away with -- and what they are being offered today.
This week a union leader accused government of giving away the country's cash cow. Indeed it is a cash cow that consumers are paying for dearly and unionists are milking without shame.
The backwardness of BTC has retarded the growth of this country's financial industry as well as local businesses that have been forced -- thanks to the computer -- to try to avoid the BTC monopoly as far as possible.
All we have heard so far is what the unionists want of BTC. It is now time for the consumers to be heard. Consumers want lower prices, better service and an ability to enter the world market without being hemmed in by suffocating monopolies.
Read the Cabinet statement and understand how Bahamians are being hoodwinked by politicians -- there is indeed no comparison with the Christie-backed Bluewater deal to what is being offered today by Cable and Wireless Communications.
December 16, 2010
tribune242 editoial
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