In an­nounc­ing the com­ple­tion of its ac­qui­si­tion of Ca­ble and Wire­less Com­mu­ni­ca­tions (CWC), Lib­er­ty Glob­al sig­naled its clear in­tent to for­ti­fy its re­gion­al pres­ence in Latin Amer­i­ca and the Caribbean.

This trans­ac­tion is of par­tic­u­lar con­cern to T&T for one ma­jor rea­son: TSTT.

Cur­rent­ly, CWC re­mains a mi­nor­i­ty share­hold­er in the lo­cal telecom­mu­ni­ca­tions provider; con­trol­ling 49 per cent of the com­pa­ny's share­hold­ing.

Last year, the Telecom­mu­ni­ca­tions Au­thor­i­ty of T&T (TATT) man­dat­ed that CWC off-load its stake in TSTT with­in one year in or­der for ap­proval to be giv­en for its in­tend­ed ac­qui­si­tion of Colum­bus In­ter­na­tion­al; a di­rect com­peti­tor to TSTT.

To date, how­ev­er, CWC re­mains in pos­ses­sion of its stake in TSTT.

On a con­fer­ence call an­nounc­ing the Lib­er­ty Glob­al ac­qui­si­tion of CWC, CEO of CWC John Reid was asked by a jour­nal­ist di­rect­ly:

"Do you ex­pect the reg­u­la­tors in T&T to ap­prove of this deal giv­en that Ca­ble and Wire­less has not ful­filled the terms of its March 2015 reg­u­la­to­ry ap­proval to sell the 49 per cent of TSTT?"

Reid said that con­sid­er­able ef­fort had been made to off-load the TSTT as­set but, to date, no buy­er has been found.

"It needs to be un­der­stood that there has not been a lack of ef­fort to di­vest that par­tic­u­lar as­set. We've en­gaged all the rel­e­vant gov­ern­ment par­ties and ex­tend­ed agen­cies. It's an on­go­ing process that some­times takes time."

Reid al­so added that po­lit­i­cal changes have af­fect­ed its at­tempts to sell.

"We've had gov­ern­ment boards changed, we've had reg­u­la­to­ry agency boards changed and so that con­tributes to it tak­ing longer than an­tic­i­pat­ed but our ex­pec­ta­tion is that, based on our con­tin­ued ef­forts to di­a­logue with the var­i­ous par­ties, this will not in­ter­rupt this process. We will be giv­en the green light to pur­sue this sale to Lib­er­ty Glob­al."

Reid was al­so asked:

"How dif­fi­cult is it to sell 49 per cent of a com­pa­ny like TSTT?"

To this he re­spond­ed: "(Sell­ing) 49 per cent of any com­pa­ny–where you don't con­trol the oth­er 51 per cent–cre­ates cer­tain chal­lenges. It would take a cer­tain in­vestor and it would take some­one who be­lieves in the mar­ket as we did."

The Busi­ness Guardian reached out to var­i­ous play­ers in the telecom­mu­ni­ca­tions in­dus­try to get their take on the CWC ac­qui­si­tion and its im­pli­ca­tions for the lo­cal telecom­mu­ni­ca­tions mar­ket.

Of crit­i­cal im­por­tance to this trans­ac­tion, and for it to pro­ceed, reg­u­la­to­ry ap­proval would have to be grant­ed by TATT.

When con­tact­ed for com­ment, act­ing CEO of TATT, Cyn­thia Red­dock-Downes said the au­thor­i­ty had tak­en note of Lib­er­ty Glob­al's ac­qui­si­tion of CWC but that no de­ci­sion had been tak­en with re­spect to CWC's TSTT stake.

She said: "The au­thor­i­ty is cur­rent­ly as­sess­ing the Lib­er­ty Glob­al-CWC trans­ac­tion with re­spect to its im­pact on the over­all mar­ket and its im­pact on com­pe­ti­tion in the mar­ket."

Ques­tioned on whether CWC's fail­ure to sell its 49 per cent stake in TSTT would be a prob­lem for the au­thor­i­ty in ap­prov­ing Lib­er­ty's ac­qui­si­tion of CWC, Red­dock-Downes said: "No de­ci­sion has been made by the au­thor­i­ty with re­gard to which di­rec­tion it will take in treat­ing with the Lib­er­ty Glob­al-CWC trans­ac­tion."

Un­der the terms of its man­date, CWC was giv­en the op­por­tu­ni­ty by TATT to re­quest an ex­ten­sion should it not be able to sell its stake in TSTT with­in the one-year time pe­ri­od.

Asked about this, the TATT head said the au­thor­i­ty had re­ceived no­tice from CWC seek­ing an ex­ten­sion, adding: "CWC did, in fact, write to TATT seek­ing an ex­ten­sion of the dead­line to of­fload its share­hold­ing in TSTT, but no de­ci­sion has been made by TATT re­gard­ing a dead­line ex­ten­sion. TATT is cur­rent­ly con­sid­er­ing CWC's re­quest for an ex­ten­sion and, as such, has not tak­en any po­si­tion on the re­quest to date."

Na­tion­al En­ter­pris­es Ltd (NEL)–the gov­ern­ment agency that holds 51 per cent of TSTT on be­half of the Gov­ern­ment–met with CWC last year to be­gin talks in or­der to fa­cil­i­tate the or­der­ly dis­pos­al of CWC's stake in TSTT.

Ac­cord­ing to NEL's 2015 an­nu­al re­port: "In 2014, Ca­ble and Wire­less (CWC) an­nounced a pro­posed merg­er with Colum­bus Com­mu­ni­ca­tions, sub­ject to reg­u­la­to­ry ap­proval in var­i­ous ter­ri­to­ries in­clud­ing T&T. The Telecom­mu­ni­ca­tions Au­thor­i­ty ini­tial­ly de­nied ap­proval for the said merg­er, and lat­er re­con­sid­ered its de­ci­sion and made such ap­proval con­di­tion­al on CWC agree­ing, with NEL, to a process to di­vest its 49 per cent share­hold­ing in TSTT.

"A di­vest­ment and sus­pen­sion agree­ment was sub­se­quent­ly signed be­tween CWC and NEL, and this project is now un­der­way to look for a new strate­gic part­ner for TSTT."

Con­tact­ed for com­ment on the ne­go­ti­a­tions be­tween both par­ties, NEL gen­er­al man­ag­er Kr­ish­na Ram­lo­gan said that com­mu­ni­ca­tion with both par­ties is on­go­ing.

He said: "The dis­pos­al of the shares is an on­go­ing project."

Asked to com­ment on what stage the project had got­ten to, he re­it­er­at­ed that it was "on­go­ing" and that he could not com­ment any fur­ther on the mat­ter.

CWC/Colum­bus Com­mu­ni­ca­tions ac­qui­si­tion

On No­vem­ber 6, 2014, Ca­ble and Wire­less an­nounced a con­di­tion­al agree­ment to ac­quire Colum­bus In­ter­na­tion­al. The pro­posed ac­qui­si­tion was val­ued at US$3.025 bil­lion.

On De­cem­ber 5, 2014, CWC share­hold­ers vot­ed in favour of the ac­qui­si­tion of Colum­bus In­ter­na­tion­al clear­ing the way for the ac­qui­si­tion to move ahead.

Terms of the ac­qui­si­tion in­clud­ed CWC pay­ing US$1.85 bil­lion for 100 per cent of the eq­ui­ty in Colum­bus In­ter­na­tion­al, while US$1.71 bil­lion would be al­lo­cat­ed to as­sum­ing Colum­bus net ex­ist­ing debt as at June 30, 2014.

In ac­cor­dance with the terms of the ac­qui­si­tion CWC is­sued 1,557,529,605 new con­sid­er­a­tion shares to the prin­ci­pal ven­dors, rep­re­sent­ing ap­prox­i­mate­ly 36 per cent of the or­di­nary shares in CWC.

The ac­qui­si­tion was fi­nalised on March 31, 2015, with TATT's con­di­tion­al ap­proval of the trans­ac­tion pend­ing the sale of the 49 per cent stake in TSTT, be­ing piv­otal.

In T&T, Colum­bus In­ter­na­tion­al op­er­at­ed un­der the Flow brand which pro­vides broad­band, fixed and mo­bile telecom­mu­ni­ca­tions ser­vices.