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Tuesday, July 7, 2009

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Government to launch formal BTC sale process By CANDIA DAMES ~ NG News Editor ~ candia@nasguard.com: With the regulatory framework now in place, the government will in the coming week launch a formal process to sell off 51 percent of the ownership of The Bahamas Telecommunications Company (BTC), Prime Minister Hubert Ingraham announced in the House of Assembly yesterday afternoon. In May, the House passed the Communications Bill, the Utilities Regulation and Competition Authority (URCA) Bill and the Utilities Appeal Tribunal (UAT) Bill to pave the way for liberalization of the telecoms sector. "As the government continues to work towards the privatization of BTC, and the liberalization of The Bahamas' electronic communications sector, this regulatory reform was a critical step towards ensuring that international best practices standards are met, while also enhancing the value proposition to potential partners for BTC," Ingraham said. "With URCA in place as an independent regulator to promote good business practices and foster a competitive environment, the new regulatory regime seeks to increase both investor and consumer confidence. Now that the new regulatory structure is approved and all other due diligence largely completed by the Privatization Committee and its team of advisors, the stage is set for the commencement of the privatization process." The prime minister announced that parties will be invited to enter a pre-qualification process in order to be considered as potential strategic partners. "This process is designed to allow the government to determine which potential partners are appropriate from a strategic as well as a financial standpoint," he said. "Those who pre-qualify will then be invited to participate in a formal due diligence exercise, ultimately resulting in an economic bidding process for the 51 percent stake in BTC." Ingraham reiterated that any potential strategic partner must be a well-sourced entity or consortium with established credentials in the telecommunications industry that can provide the company with growth opportunities and position BTC for long-term success. He added, "The strategy of those interested parties must also be aligned with the key objectives of the government, who will continue to hold a 49 percent ownership stake in the company." While he had previously indicated that the government intended to use proceeds from the sale of BTC to build a new hospital, Ingraham said during his recent budget communication to Parliament that substantial proceeds from privatization will be used to reduce the borrowing requirements of the government. Ingraham said yesterday that the government is committed to the execution of an efficient process to be completed within "a relatively short time frame". He added that interested parties should begin to prepare for the pre-qualifying process. The prime minister said the new regulatory structure and liberalized market are expected to drive growth in telecommunications, which will yield significant positive economic benefits for The Bahamas including job creation, increased domestic and foreign investment, an enhanced tourism product and a modernized infrastructure for business. He added that in order to encourage healthy competition, fixed line telecommunications services, cable and IPTV and Internet services will be liberalized immediately upon the coming into force of the Communications Act. He repeated that mobile services will be liberalized two years following the privatization of BTC. In a communication to Parliament 11 years ago, the government announced its intention to privatize the then Bahamas Telecommunications Corporation. The assets of the corporate were vested in The Bahamas Telecommunications Company Limited in September 2002. As noted in the most recent financial statements of the company, the first privatization process saw a number of potential strategic investors conducting due diligence on the company during 2003. However, on December 12, 2003, the government-appointed Tenders Commission announced that it had not accepted any of the bids. In 2005, the government commenced negotiations with a single bidder for a 49 percent ownership of the company. According to documents obtained by The Nassau Guardian, the former Christie administration had agreed not long before leaving office in 2007 to sell a 49 percent stake to Bluewater telecoms company, but the new Ingraham government rejected that plan. Wednesday, July 1, 2009