BELIZE CITY, Mon. Sept. 14, 2015–On July 4, 2011, the administration of Prime Minister Dean O. Barrow passed legislation in the National Assembly to nationalize the country’s primary telecommunications provider, Belize Telemedia Limited (BTL), for a second time, following the Belize Court of Appeal decision on June 24, 2011, that the first acquisition in August 2009 was unconstitutional, null and void.
The nationalization of BTL opened a floodgate of litigation over its legality and constitutionality that went all the way to the Caribbean Court of Justice (CCJ), which was expected to issue a ruling in its next session between October and December this year.
However, that court ruling from Belize’s highest court will not be necessary now, because today at a press conference at the Best Western Biltmore Hotel, Prime Minister Barrow, who is also Minister of Finance, announced that he had personally negotiated a settlement agreement with British billionaire Lord Michael Ashcroft for the government’s acquisition of BTL.
From his seat at the head table, between Financial Secretary Joseph Waight and the BTL chairman Nestor Vasquez, Prime Minister Barrow said, “I am extraordinarily pleased to be able to make this announcement… I will sit as I tell you this fantastic bit of good news, that the Government of Belize has settled the BTL issue.”
“We have reached an agreement with the former shareholders of BTL and the BTL Employees Trust and the British Caribbean Bank Limited,” Barrow said.
Barrow went on to state, “Lord Michael Ashcroft has always insisted that he had no financial interest in BTL. I am prepared to take that at face value, but in the interest of full disclosure he was the person with whom I negotiated.”
“He was doing this, according to his words to me, as a sort of Good Samaritan, on a kind of pro bono basis,” Barrow added.
“Ink was put to paper last Friday and tomorrow we will take to the House a bill for an act to appropriate further sums of money in order to pay compensation and we will also [table] the Telecommunications Settlement Act 2015,” explained Barrow.
Barrow’s BTL settlement announcement comes less than one month after the government had reached a US$35 million cash settlement agreement with Fortis Inc., the Canadian multinational energy company, for 37% shareholding in Belize Electricity Limited (BEL), plus the return to Fortis of 33.3% of BEL valued at BZ$117.9 million.
In the BTL settlement, government has agreed to pay $162.7 million in compensation.
The Prime Minister went on to explain that in 2009 Government acquired the shares in BTL and a US$22.5 million loan that the company had made from British Caribbean Bank which had remained on its books, and for which the bank had won an arbitral award of US$48.5 mil under the UK-Belize Bilateral Investment Treaty. Both the Barrow administration and the nationalized BTL had claimed that the BCB loan was illegal and so the company was not liable to repay it.
“Financing for the settlement with the British Caribbean Bank will come from dividends and contribution due from BTL; from the sale of additional Treasury Notes; and from Petrocaribe funds,” said an official release from the government.
Barrow detailed that BTL will pay US$10 million dollars cash and Government will make up the shortfall of around US$19 million dollars from the Petrocaribe fund.
“In terms of the arbitration tribunal, if the value that it awards does include an element of the accommodation agreement, I’ve negotiated so that that portion will be separated out and will be described as the restricted amount. Apart from the restricted amount, I will pay to the previous shareholders of BTL what the tribunal orders and I will pay what the arbitration tribunal orders in US dollars. The restricted amount will be paid in Belize dollars and will have to be spent in Belize on charitable projects for the good, welfare and wellbeing of the people of this country, such projects to be identified to the trust that gets the restricted amount by the Government of Belize.
“Now the owners of the trust can say, ‘well, we don’t think a particular project that you identified is feasible’ and we will go at it until there is agreement. It is not going to be our money, but it has to be spent at our behest, but, there must be agreement on the projects for which it will be spent,” Barrow outlined.
“As part of the settlement, the government shall make a partial compensation payment to Dunkeld at the rate of US$0.72 per share for 34,107,117 shares totaling US$24,557,124; and another partial payment to the Trustees of the BTL Employees Trust also at US$0.72 per share for 11,092,844 shares totaling US$7,986,848,” the government also announced via press release.
“This is in line with the valuation done by NERA Economic Consulting. When the Arbitration Tribunal determines the final award amount, the Government will then make a final payment of compensation over a period of time, based on that arbitration award less any amounts already paid by the Government,” the release added.
Government plans to make initial part payments to Dunkeld and to the BTL Employees Trust from monies held on deposit arising from the sale of BTL shares in 2010.
Barrow said that the government has retained the BZ$71 million which it collected when it sold the BTL shares after acquisition at $5 each.
“That’s the amount that was frozen by the CCJ. It is now ours to deal with as we wish,” Barrow said.
There are two settlements, the Prime Minister emphasized: one disposing of the BCB award and the other for Dunkel and the BTL Employees Trust. These two settlement deeds will be attached to the Telecommunications Acquisition Settlement Act and that bill will go together with the Supplementary Appropriations Bill for the payments that were just discussed, Barrow said.
Barrow explained that these payments are not subject to taxes, and they will be taking provisional amounts to Parliament that may be ordered by the tribunal to be paid. These will be charged to the Consolidated Fund, he said.
Barrow said that when the acquisition was challenged in court, Government won in the first instance, but then lost at the Court of Appeal.
“We did not seek to take that appeal to the CCJ, but we renationalized a second time. We’ve enshrined in the Constitution the nationalization. As a matter of constitutional writ, BTL should always be owned at least 51 percent by the government and people of this country. Of course that was challenged,” Barrow mentioned.
Barrow said that “…the Ashcroft interest appealed to the CCJ and the challenge included this argument that our attempt to enshrine the acquisition in the Constitution was itself unconstitutional.”
Barrow said that a correspondence has been sent to the Registrar of the CCJ to acquaint the court with the terms of the settlement and a formal consent order will be sought within three business days after the legislation would have been passed by the National Assembly.
Barrow pointed out that, “Our unshakable, philosophical conviction [is] that all utilities must be owned by the government and people of Belize.”
He said he would not spend any time justifying the nationalization because apart from the question of sovereignty and patrimony, “Both BEL and BTL have performed splendidly under the stewardship of a board of directors appointed by the Government of Belize and consumers have benefitted, the Belizean public has benefitted, from the ownership of those two utilities.”