Local arm of C&W looks set to be sold

GUERNSEY’S arm of Cable and Wireless is to be sold to a Middle Eastern company as part of a major $680m. deal – subject to approval from the regulator.

CICRA chief executive Andrew Riseley

GUERNSEY’S arm of Cable and Wireless is to be sold to a Middle Eastern company as part of a major $680m. deal – subject to approval from the regulator.

Cable and Wireless Communications (CWC) has confirmed it has struck a deal with Batelco Group of Bahrain for the sale of a majority of its Monaco and Islands business, including Sure’s operations in the Channel Islands. The announcement comes 10 years after CWC bought Guernsey Telecoms from the States for £23.8m. and less than three months after the Guernsey Press first revealed talks were being held with the Bahrain company.

The sale is still subject to approval from the Channel Islands Competition and Regulatory Authorities (Cicra), which yesterday said it had the power to approve, refuse or impose conditions on the transferral of the fixed line and mobile phone licences from Cable and Wireless to Batelco.

Cicra chief executive Andrew Riseley (pictured) reiterated the regulator’s commitment to protecting the interests of customers, whoever the licence holder might be.

Comments for: "Local arm of C&W looks set to be sold"

markB

Not a bad return .....all Thanks to Mr Bell

yay!

Marvelous news, say hello to all sorts of interesting additional charges that fall outside of the remit of the purchase agreement an' kiss good bye to ever having an affordable and competitive network for finance or any other network dependant companies like the ones Kev's proposing would form part of the future diversification of our islands industries.

Dave Jones

This must be the same Cable & Wireless who were telling me and the rest of the Island that they were committed to Guernsey just a few weeks ago.

There is one more reason now why we should take this company back under our control not by buying it but by nationalising it.

Stephen John

Dave

The main commitment of this company was to make as much money out of Guernsey as possible.

And don't forget the 12 or so million. Pounds, in the bank accounts, that were given to CW when they were given Guernsey Telecoms.

GM

Dave Jones

Whilst I sympathise with your view, the moment Guernsey starts to "nationalise" companies without paying full market value (which we clearly cannot afford), is the day that we are finished as a credible jurisdiction. Who on earth would risk placing assets or invest in Guernsey's infrastructure then? That's what places like Argentina and Zimbabwe do...

We cannot undo a deal which was done (wrongly, badly, and possibly negligently) all those years ago. The States as a whole made a decision and the island has to stand by it. We can sure as hell make sure that it doesn't happen again though, by using better negotiators and professionals to prevent us from giving things away too cheaply, and perhaps ideally seeking "carried interests" in any sell-on, or to have options to buy it back (the option itself would then have a capital value, even if we couldn't afford to exercise the option). There are many ways to skin a cat when a commercial deal is being done. Being commercially naive and exploited as a result is not one of the best options though!

Dave Jones

GM

I cannot think of a more important strategic asset than our communications network, I said at the time of the giveaway that this was shortsighted and unnecessary and I would not support it.

I think any external investors would understand the importance our telco company is the the finance sector and I think provided there was some recompense then nationalising it would be clearly understood.

The price the Shiek has paid is of course for a number of islands and jurisdictions where C&W have assets so the Guernsey part could be manageable and in any event we would only require a controlling interest. We do have some money and we could borrow for this one off aqasition buying that controlling interest at a fair price, which may not be what they are asking but would be fair.

We simply cannot have a situation where we are at the mercy of the decisions made off island when it comes to our communications and although I have not worked out all the details as that would take a better brain than mine, I do believe that we must regain some control.

The UK didn't suffer that harshly from privatising the rail companies.

GM

Dave Jones

If the funds were available to buy back a controlling interest at market value then I would totally agree with you. Nationalising an asset and paying fair market value is very different from not paying market value for it. Can we truly afford it? I am not convinced, although I accept that we may not be able to afford not to!

It wouldn't be a smooth political ride using taxpayer money to buy back something for several times more than we sold it for.

Might need to crack on with sorting out the public sector pension scheme first to help pay for it. Now that WOULD help.

Mark

Hi Dave,

I agree with your post, and I would assume that you feel strongly too that Guernsey Telecoms should not have been given away so cheaply to Cable and Wireless a few years ago.

As an island community, Guernsey should where possible have control over it's own assets. Yes, maybe go into partnership to ensure expertise, but retain at the very least a 50% stake in control.

But to your point about 'taking the company back'. How could this possibly now be achieved without significant and unaffordable cost to the island?

Dave Jones

Mark

The whole point of nationalising something is to bring it under the umbrella of government control in the public interest. Any company facing that choice would be well advised to recognise that fact and do a deal with the government of the day or risk loosing a substantial investment. 49% of something is better than nothing, for them.

I think GM’s point about whether we could afford it is a good one. My view is that in this exceptionally special case and taking the long term view, we should consider borrowing to do so.

We have considerable reserves in different funds and should consider investing in our own infrastructure and getting a healthy return on that investment. What we have now is our major Telco company being sold off underneath us with no idea what the future security is for that company or the vital services that it supplies and which we rely heavily on.

John

Yes Dave, I totally agree. It should never have been sold. Rather given away! Yes it should be nationalised as it used to make substantial amounts of money without ever raising charges. We have been bled by C&W since they appeared on the scene. Please don't do the same with Water and Electricity. Name change From States.... To Guernsey..... Suggests to me this is on the cards sometime onwards?

robert

Surely if we nationalise it now, very quickly (like this week), before the ink is dry on this deal it won't be Cable & Wireless's to sell. That way at the very least they will be forced to renegotiate the original deal. Once the new people get their hands on it, you can kiss all that goodbye.

Scarlett

regretfully, certain members of our States appear more focussed on the urgent matter of gay marriage than they are on trivia such as this, robert...

aren't we all so glad we voted in this new broom?

I know I am!!!

....oops, must go, trying to save my space in the broom cupboard before Nursey catches me. If I lose it, when they close they ward, the others will get the best spots and I'll end up next to the cleaning fluids again, an' I'm feeling dizzy as it is.........

slinky

Perhaps the states could offer to install fibre to every home in Guernsey like the states have done in Jersey.

As part of the deal. In return we receive a controlling stake and the people of Guernsey see something in return.

James W

While £23.8m was the figure often quoted, it ignores the fact that most deals are done on a "cash free/debt free basis", which the sale of GT was not. There was £13m of cash in the bank upon the sale taking effect so that gets you to £10.8m and the SoG threw in the ownership of the submarine telecom cable that Guerseny Electricity owned, which was worth at least £3m. So you're really somewhere between £5m - £10m, and it's now been sold for many many multiples of that. We've just been had, and this deal proves. Further C&W have invested a tiny fraction of what they said they would in Guernsey and here now we have the pleasure of our key infrastructure being owned and operated out of Hamala in Bahrain.

Zab

I was appalled when GT was given away, which of those deputies are still with us?

GM

We have no details of what percentage of the $680m deal relates to the Guernsey arm, but to have sold it so cheaply at the time looked a bad enough decision and it sure (no pun intended) now looks like an even worse one.

Mind you, the States at the time would only have wasted anything extra on gold-plated projects.

A modest carried interest, resulting in a slice of the current deal, would have provided a welcome windfall today!

Dani

Could CICRA block it on the grounds of not being in the publics best interest if it was found not to be? If you don't want the sale to go through its a good place to start I would think.

Dave Jones

Dani

We will have to see what CICRA's view is as they are looking at this deal now but i am not holding my breath that they will do very much at all.

Dani

I think you made some great points above why it wouldn't be and do hope they get communicated to CIRCA.

Benedict

Dear Dave Jones,

Last night I submitted a post. It consisted of two words of Arabic, in Arabic script. I thought that it made a point succinctly.

Please continue to work assiduously.

markB

Is there room to set up another telecoms company “a local one”... That people could choose to use instead of Cable and Useless.

Benedict

أكبرالله

Ray

That's a copy of what David Beckham has on his left forearm and I think he has it registered within his image rights package

L'eree Lad

Ray,

I didn't know you took such an active interest in Becks' package ?!