The Government of Belize has closed the sale of 10 million shares in Belize Telemedia Limited (BTL) to the Social Security Board (SSB)—a $50 million deal which gives the SSB a 20% stake in BTL, according to official reports to Amandala.
The shares were transferred on Wednesday, December 1, 2010, pursuant to a share purchase agreement dated November 23, 2010.
Amandala understands from SSB chief executive officer, Merlene Bailey-Martinez, that the two SSB directors who the SSB is now entitled to name to the board of BTL have not yet been appointed. The selection would be made by the board of directors of the SSB, chaired by Lois Young, SC.
At the 4th Annual General Meeting of BTL held on Tuesday, December 2, 2010, BTL chairman, Nestor Vasquez, told shareholders that SSB is now an associated company of BTL.
Amandala understands that the SSB, by law, would now be required to include its share of BTL’s income in its financials.
Financial Secretary Joseph Waight has also confirmed with Amandala that the SSB had recently purchased BZ$50 million worth of shares.
“There have also been some purchases by individuals amounting to about BZ$300,000. People from abroad have been mailing in their completed share subscription forms along with cashiers cheques, but these have been only a few,” he added.
The current sale of shares to the public is at BZ$1.00 under the assessed market value, according to Prime Minister Dean Barrow. The sale price is $5.00 a share in blocks of 100 shares. The offering of October 15, 2010, will be open at least until the end of December.
Clarifying the details of the 2005 sale of BTL shares in a former buy-back and resale, Waight informed Amandala: “In September 2005, Sunshine Holdings purchased some 7,375,038 ordinary shares in BTL from the Government of Belize for a total consideration of US$20.0 million.” (By our newspaper’s calculation, this amounts to a sale price of BZ$5.42 a share.)
Waight confirmed that Sunshine had bought the shares with financing from three entities: Belize Bank Ltd. – US$10.0 million, which was paid to GOB in September 2005; Social Security Board – BZ$10.0 million, paid to GOB also in September 2005; and Government of Belize – BZ$10.0 million – via a loan note to be paid in 2017, 12 years from date of loan note. (Sunshine had also obtained a BZ$10 million loan note with the SSB to help finance the purchase of shares.)
“In addition to the sale of shares to Sunshine Holdings Ltd., the GOB sold shares to other companies in the Michael Ashcroft group: ECOM Ltd. for US$999,998.00; and Theirmon Ltd. for US$2,500,107; and Belize Bank Ltd. for US$4,956,551.” Funds were received for these transactions in October 2005, said Waight.
Prior to these transactions, the then Musa administration sold off SSB’s 25% stake in BTL to American Jeff Prosser through Innovative Communications Corporation (ICC) and later to the Ashcroft group, bundling the shares with a batch of government shares to give the Ashcroft group a supermajority of over 90% in BTL. The Ashcroft group had held just over half the shares before the nationalization/buy-back of 2004-2005.
In August 2009, the Barrow administration, via a legislative maneuver, nationalized BTL, thereby acquiring the shares sold to Sunshine, ECOM, Theirmon, and other companies that were under the umbrella of the Ashcroft group of companies.
The nationalization continues to be the subject of both local and foreign arbitration.