Cable And Wireless Communication Plans To Sell Shares In TSTT As Conditions For Merger With CCI

PORT OF SPAIN, Trinidad, CMC – The British telecommunication giant, Cable and Wireless Communication (CWC), says it is prepared to sell its 49 percent minority shares in the Telecommunication Services of Trinidad and Tobago (TSTT), as it seeks approval for a multi-billion dollar take merger with Columbus Communications International (CCI).

Earlier this week, the Telecommunications Autho­rity of Trinidad and Tobago (TATT) said it would not support the merger at least for now, until certain provisions are met.

“CWC fully recognised that our shareholding in TSTT would need to be neutralised, either by a blind trust or by disposal of our shares,” CWC said in a statement.

Last year, CWC and CWI announced the deal in a joint statement, saying the proposed acquisition, valued at US$3.025 billion will enable the combined company to significantly accelerate its growth strategy, improve service delivery to customers in the region, offer customers a comprehensive portfolio of high-quality products and services, and strengthen their position against larger competitors.

But in a four-page statement issued here, TATT said that in order to allow acquisition to proceed, there must be a submission of an agreement for the complete divestment of CWC’s 49 percent shareholding in the Telecommunication Services of Trinidad and Tobago (TSTT) in consultation with the majority shareholder, the National Enterprises Limited (NEL), and be approved in writing by the Authority.

In addition, TATT said that “to ensure within the agreement an undertaking that competition will not by stymied” and, in the meantime, CWC “suspend its rights until the sale is concluded.”

Further, TATT said that it “must be satisfied with the process moving forward” and that “the divestment be comple­ted within a year or an extended (if required) deadline of 18 months, failing which, the Authority shall take such steps as available under law.”

In a statement, CWC said it was looking forward to working with NEL, “to agree a fair process for disposal, as embodied in our existing shareholder agreement, and are supportive of a disposal process that permits an orderly sale to be concluded in a period of not more than 18 months.”

CWC, which said its TSTT shareholding should be attractive to a number of investors, said that it has “ambitious plans for Columbus and intends to make investments to roll out high speed broadband across the country.

“The company plans to build a new Data Centre to host the growing Business to Business (B2B) Managed Service offer, as well as expand its Network Operations Centre, and open a Technology Centre, creating additional jobs to the over 800 staff already employed.

“We look forward, therefore, to meeting the required conditions precedent shortly and receiving consent for the change of control in Flow T&T’s licences.”

NEL also indicated that it had taken note of the decisions by TATT regarding the proposed merger, adding that  it “views these directions of the Authority positively, as it recognises that continued presence of CWC directors on TSTT’s board and exercise of other rights, creates a conflict of interest with a potential competitor. The suspension of rights immediately is a positive step in the right direction of protecting TSTT’s plans, marketing, financial and other information.”

NEL said it has considered the possible scenarios and implications since the announced merger of CWC and will be meeting with CWC on March 16 to discuss the divestment of CWC shares in TSTT.

“Our approach is to ensure that TSTT will continue to be a viable, sustainable business. We, however, believe that it is not in the best interest of our shareholders to seek a 100 percent shareholding in TSTT, so alternative divestment methods will be pursued.”

NEL told shareholders that the board “has been and will be doing what is required to secure its interest in TSTT.”