BTC talks in limbo
Guardian News Editor
Published: Oct 18, 2013
Prime Minister Perry Christie said last night the announcement by Cable & Wireless Communications (CWC) that its CEO Tony Rice has resigned could halt the government’s negotiations with CWC to reacquire two percent of the firm’s shares in the Bahamas Telecommunications Company (BTC).
“It may stop negotiations and we have to determine whether the negotiations had some implications to what happened to him,” Christie told reporters following the opening of the newest terminal at Lynden Pindling International Airport.
CWC, the majority owner of BTC, yesterday announced the appointment of Phil Bentley as its new CEO.
Bentley is the former managing director at British Gas, the United Kingdom’s leading energy and services provider between 2007 and 2013.
Christie said Cabinet only recently considered Rice’s latest proposal on the share take back.
“He gave me a response that I could get the two percent with conditions,” the prime minister said.
“I don’t want to say now. Ultimately, I may have to publish those conditions.
“...He wanted a better relationship between the Bahamas government and Cable & Wireless and other matters.”
Christie added: “I don’t know the implications of his resignation and so before I go any further I would have to determine exactly for our purposes what his resignation means to the discussions we are having.
“There is only the implication that it was most certainly unexpected by me because my Cabinet had only just before it on Tuesday last the negotiating committee presenting to us the submissions of Tony Rice as to settling the issue of the two percent.”
Christie’s comments came hours after Bahamas Communications and Public Officers Union (BPCOU) President Bernard Evans expressed concerns over what he called uncertainties fueled by the resignation.
According to a statement from CWC, Bentley led the turnaround of British Gas, increasing profits from £300 million to £1.1 billion, and sales by over 30 percent to £14 billion.
Bentley will succeed Rice with effect from January 1, 2014, CWC said. He will also become the new chairman of the board of BTC.
His appointment comes as CWC establishes new executive offices in Miami, Florida.
It also comes as the Bahamas government seeks to conclude its efforts to once again become the majority owner of BTC.
In a highly controversial move, the Ingraham administration sold 51 percent of BTC to CWC in 2011.
Businessman Franklyn Wilson, who chairs the committee appointed by the prime minister to negotiate the share take back with CWC, said yesterday he was “very much” surprised to hear of Rice’s pending departure.
“The company was kind enough to advise us before the notice that it is going to happen,” Wilson told The Nassau Guardian.
“We have been assured that it will not impede final resolution of the matters which we have under discussion. The company has told us that, and we thank them for that.
“I go publically on record. I don’t mind saying that on a personal level I was disappointed to hear it because I found Mr. Rice to be a competent business person with excellent human relations skills, so negotiating with him was really a pleasure.
“I also understood and still understand that he is one of the largest shareholders in Cable and Wireless. It is always good to be negotiating with someone who has skin in the game, so to speak.”
Wilson said he did not know what the likely implications of Bentley’s appointment are for The Bahamas.
But he said, “For BTC, it means that come January BTC would have had three chairmen in a relatively short period of time. That as a general statement is not good for any organization.
“...Organizations tend to perform better, in my view, when there is more continuity. We never really got an explanation as to what David Shaw’s circumstances were.
“So we don’t know the circumstances under which Mr. Rice is leaving, but that’s life and that’s their business and the Bahamian public will just have to accept those realities.”
Shaw, the former chairman of the BTC board and former head of CWC’s Caribbean operations, resigned earlier this year.
Evans, the BCPOU president, indicated that his union is concerned over the planned CWC leadership change.
He said this new leadership change for the board of BTC “is a scary situation” for the union.
“We just don’t know what the future holds,” Evans said. “This is what we cautioned against. The government of the day had its say as always. I guess we have to wait and see what happens.”
Evans said relations between CWC and the union remain strained. But he said current BTC CEO Geoff Houston has been “trying really hard to maintain a good relationship with the union”.
He said however Houston is limited in what he can do.
CWC said Bentley will take forward the company’s strategy of establishing CWC as the leading provider of mobile, fixed line and broadband communications services in Latin America and the Caribbean region.
Analysts said Bentley's experience managing unions and cutting overheads would be an advantage, the Guardian in the UK reported.
CWC is investing in its operations in the region, particularly in mobile data, high-speed broadband and customer experience systems, as well as considering strategic acquisition opportunities.
It has also committed to reducing operating costs by US$100 million over the next two years, CWC said.
Sir Richard Lapthorne, chairman of CWC, said Bentley demonstrated his leadership skills at British Gas “combining strong operational capability with a real focus on customer value...”
“CWC is entering a new phase,” Sir Richard said.
“Following our recent divestments, we now have a business with a single geographic focus and a strong balance sheet and we are investing in growth areas of mobile data and high-speed broadband.”
Rice has led CWC since its 2012 demerger from Cable and Wireless Worldwide.
The CWC statement did not give a reason for his resignation.
"Investors had very much entrusted Rice, as a visionary CEO, to lead M&A (mergers and acquisitions) in the region with the company's strong balance sheet post disposals," David Wright, an analyst at Deutsche Bank, said in a note published in the UK Guardian.
"As such, our view is that his departure is a significant loss."