ATN confirms 'credible' offer for GT&T
By Gitanjali Singh
Stabroek News
March 2, 2003
Cornelius Prior, chief executive officer of Atlantic-Tele Network (ATN) confirmed that a "credible, unsolicited" offer had been received for ATN's 80% share in the Guyana Telephone & Telegraph Company (GT&T) but denied that these shares had been up for sale for some time.
"A story in the Guyana press yesterday [Wednesday] that among other things, claimed ATN has been trying for some time to sell its interest in GT&T is incorrect," Prior said in a statement to Business Wire on Thursday.
However, he confirmed that the company recently received "a credible, unsolicited indication of interest in such a transaction."
"As we have said in the past, we consider any serious proposal that may enhance shareholder value, but it is the general policy of the company not to comment on any such proposal unless and until an agreement in principle is reached," Prior said in the statement.
Stabroek News on Wednesday reported Cable and Wireless to be interested in acquiring ATN's 80% shareholding in GT&T and further quoted GT&T's deputy General Manager, Terry Holder, as saying that ATN's shares in Guyana had been on the market for some time but there had been no willing takers. Holder had doubted that Cable & Wireless was in a position to make an offer for GT&T given its own difficulties.
Contacted on Friday, Holder said he would defer to the statement of Prior as he had a greater base of knowledge on the issues. "Whatever the chairman says has to be the position and whatever he says clearly overrides what I said."
Cable & Wireless in early February made an approach to Prior to acquire ATN's shares in GT&T after having briefed President Jagdeo and other members of his cabinet in January on the firm's interest in Guyana's telecommunications sector.
Roger Mortimer led the team to Guyana but he could not be contacted for a comment on the issue and Cable and Wireless Public Relations Officer, Peter Eustace said the firm would not be commenting on telecommunications in Guyana. Eustace would not confirm that a formal offer had been put to ATN.
ATN and GT&T have had an acrimonious relationship with the government and the Public Utilities Commission and in recent negotiations with the government offered to buy the government's 20% holding in the firm in compensation for giving up its monopoly rights. However, those talks broke down after ATN moved to block a US$18 million loan the government was seeking from the Inter-American Development Bank to modernise the way government services were accessed and to allow for internet access by most Guyanese.
Prior, in the statement on Thursday, said ATN would work to resolve its differences with the government and seek to enhance shareholders value by increasing the annual return on its investment in GT&T.
GT&T continues to be the most profitable company in which ATN has a stake, showing an operating profit of US$26.8M last year as against US$33.7M the previous year, a 21% decline. This was because of a US$22.8M reduction in international long distance revenue caused by the reduction in international settlement rates. However, the increases in local rates offset the impact of this. Local service revenues went up by 50%, moving from US$18.5M at the end of 2001 to US$27.7M at the end of 2002.
The increase in local exchange revenues was also as a result of a US$4.4M increase in cellular revenues and an increase of US$4.8M in fixed wire line subscriber revenue. Cellular subscribers moved from 39,206 at the end of 2001 to 79,915 at the end of 2002, an increase of 40,709 or 103%. Wire line subscribers moved by only eight per cent from 79,913 to 86,245.
The other companies owned by ATN namely Atlantic TeleCentre in Guyana and the Choice Communications in the US Virgin Island made operating losses. The 43% stake in Cellular One earned ATN US$1.9M in net income, compared with US41.2M the previous year.
Net income for ATN in 2002 was US$9.4M, a three per cent improvement on the previous year.
Prior said in the statement that 2002 was a very challenging year for the firm as it faced revenue reduction of US$3 million per month due to the impact of the lowered settlement rates. He said these lowered rates were not reflected to US consumers but towards the end of 2002 traffic volume picked up due to an increase of over 46,000 customers in Guyana.
Prior said the company suffered in 2002 because the Government of Guyana refused to permit re-balancing of local rates but this was offset because of the dramatic increase in cellular subscribers and solid growth in wire line services. The company increased its dividend payout last year and had over US$30M in cash at the end of the year.
