Cable and Wireless interested in GT&T
By Gitanjali Singh
Stabroek News
February 26, 2003
Cable and Wireless has approached Atlantic Tele Network (ATN) to acquire its 80% share in the Guyana Telephone and Telegraph Company Limited (GT&T).
The United Kingdom company had late last year written the government expressing interest in buying out ATN and followed this up by sending three senior officials to meet the government in January.
Roger Mortimer, head of portfolio management, led the delegation to see President Bharrat Jagdeo, Prime Minister Sam Hinds and other government officials to formalise interest in the phone company. This was followed by an offer to ATN itself in the last two weeks, Stabroek News understands.
Hinds yesterday would not be drawn into commenting on the issue, saying it was a matter for the principals of the two firms.
Sonita Jagan, head of the local phone company could not be reached yesterday on the outcome of those discussions. However, Deputy General Manager, Terry Holder, who returned a call on her behalf, said he was unaware of the approach by Cable and Wireless but would be surprised if one was made as the firm had its own problems.
Holder went on to say ATN shares in GT&T have been up for sale for over a year now but there had been no "willing takers" given the local situation. He said the offer for sale of ATN's holdings in Guyana has been public knowledge.
Cable and Wireless has a strong presence in the Caribbean and its regional investments performed well in 2002. However, Cable and Wireless Global has experienced financial difficulties as a result of events in the US and other investments in the telecommunications market. The firm made a loss of five billion pounds sterling, having written down goodwill by two billion pounds sterling on its investments (including 887 million pounds relating to the elimination of unamortised goodwill on the US MCI acquisition). Fixed assets were also written down by two billion pounds sterling.
The interest of Cable and Wireless, a lead player in Guyana's telecommunications sector, could be considered a positive sign for the government's drive to modernise the industry. It was widely felt that there were no investors looking to enter Guyana telecommunications sector.
During negotiations with the government in 2002, sources say ATN sought to buy out the government's 20% stake in GT&T. The government was reportedly unopposed to selling its stake before negotiations broke down. The sale of the government's shares in GT&T has again resurfaced and reports suggest that the government would be willing to sell its shares for US$20M, which would be ploughed into the electricity company.
Hinds yesterday said he had heard no such thing but if someone came along with an offer, the government would be willing to discuss it.
The government had entered negotiations with ATN/GT&T to modernise the telecommunications sector and to pave the way for a US$18M loan for an information and communications technology (ICT) project. However, it is reported that the terms of a proposed memorandum of understanding did not find favour with President Jagdeo and ATN broke off the talks and sought to block the U$18M loan project through court action in Washington. Data liberalisation was crucial to getting the ICT project implemented.
ATN, in the negotiations, had agreed for the data market to be opened soon after the MOU was executed. However, the conditions of liberalisation included the re-balancing of local rates to reflect $2 per minute for calls during peak hours and $1 per minute off-peak, and for internet minutes to be charged at the same level.
Cable and Wireless' interest in the local market would be in an open, competitive environment, sources said.
Cable and Wireless' hold on telecommunications in several Caribbean countries was weakened through deregulation in the telecoms sector over several years.
