Hong Kong Investor(s) in GT&T still unidentified

Apr 09, 2012 News

… successful US$30M bid was re-submitted in March

The Guyana Government and the Hong Kong (Chinese) Investor(s) whose bid has been accepted for the purchase of 20 per cent of Guyana Telephone and Telegraph (GT&T) are still at the confidentiality stage of the agreement.
This publication understands that Government is expecting a reply from the investor(s) during the course of this week following a communication that its US$30M bid had been accepted.

Head of State Donald Ramotar

Cabinet which was chaired by Head of State, Donald Ramotar, on April 4, approved the sale to the Hong Kong buyer(s) and communicated the information but remains obligated to the secrecy arrangement of the confidentiality agreement, according to Head of the Privatisation Unit, Winston Brassington.
That agreement was signed into effect early 2011 following meetings with Finance Minister Dr Ashni Singh and the Chinese investor(s).
Dr Singh visited Beijing, mid-January last year and met with the investor(s) after which two sets of lawyers/engineers/accountants travelled to Guyana later that year to undertake further fact finding.
Cabinet at that time which was headed by Bharrat Jagdeo, had asked the Privatisation Board to examine the bid. The Privatisation Unit was about to submit its response to Cabinet when Kaieteur News published the details of that bid.
At that time the Chinese company made a proposal to buy the shares for US$30M ($6B) under three phased payment structures.
NICIL had recommended that payment option, which would have seen the Government receiving the largest sum upfront– some US$25M.
The revelation by Kaieteur News however, proved to be very far reaching, as the Chinese investors at the time immediately backed out of the agreement and withdrew that US$30M bid.
The Chinese buyers had also chided the Guyana Government at the time, for having the ‘secret leaked.’
Through diplomacy and other measures the investor was weaned back onto the negotiation table.
The negotiations with the Hong Kong Buyer resumed in August 2011 and eventually led to a key two-day meeting in January.

GT&T CEO, Yog Mahadeo

The investors in January 2012, after protracted discussion with their lawyers and Guyana Government lawyers, and the two day meeting with NICIL boss, Winston Brassington in Beijing, resubmitted its offer in March 2012.
This publication understands that between July 2011 and January 2012 Yog Mahadeo, CEO of GT&T, and the investors engaged in correspondence in the hopes of a meeting in Hong Kong to discuss the offer.
This publication was further told that the proposed meeting was supposed to be very broad-based given the confidentiality agreement which was already in force between the Guyana Government and the then potential Hong Kong investor.
This meeting with Mahadeo and the Chinese Buyer was never to take place as was confirmed by the GT&T boss following the announcement of the sale. Mahadeo further said that he never met with the investors.
This newspaper was reliably informed that the Guyana Government as a minority shareholder operated under the premise that it has a right to sell its shares to anyone who puts in an acceptable offer.
So the meeting between the investor and Mahadeo was mostly for courtesy and discussions as to how best to enhance the Company, should the Hong Kong bid be successful.
This publication was also told that among the underlying factors for the Guyana Government to undertake the sale was the impending liberalization of the telecommunications industry and the possible effects that it will have on the revenue base for the local telecommunications giant.

Head of the Presidential Secretariat, Dr Roger Luncheon

The liberalization of the industry was also said to be equally responsible for the investor’s wariness coupled with other compounding circumstances plaguing the telephone company.
In late 2010 when NICIL failed to find favour with the public bids it received during an earlier request for proposals for the purchase of the shares, it again invited proposals to purchase Government’s 20 per cent “en bloc” shareholding in GT&T.
The company had previously received an offer of US$6M which did not find favour with Government.
Head of the Presidential Secretariat Dr Roger Luncheon on Wednesday last announced that the Cabinet had decided on a proposal made by a Hong Kong-based company to buy the shares for US$30M.
This however was preceded by Brassington while in negotiation with the Hong Kong buyer telling GT&T at its most recent Annual General Meeting that the sale was “off the table.”
Up until the sale, the government was receiving from GT&T, an annual dividend of US$2.5 million.
Dividends will more than likely be used to pay the two US$2.5M installments agreed to by the Government and the Hong Kong buyer.
Mahadeo following the announcement by Dr Luncheon expressed surprise at the manner in which the sale was handled.
Mahadeo stated that it was only after Dr Luncheon made the announcement and the media attempted to solicit comments from him, that he was made aware that the company’s shares were sold.
Government, following the announcement declined to disclose who the Chinese buyers were. Brassington said that as soon as he informs the buyer that his offer has been accepted he would make the announcement.