Basseterre, St. Kitts – Nevis
Septemeber 25, 2007 (CUOPM)
The Government of St. Kitts and Nevis has sold its 17 percent share holding in Cable & Wireless (St. Kitts & Nevis) Limited with the agreement that five percent of those shares be sold to residents of the twin-island Federation.
“After extensive negotiations, they (C&W) agreed that they would not exercise their right of first refusal in respect of some 1,661,538 shares of the 5,649,230 shares held by the Government. In other words they were prepared give up their contractual rights in order to allow the Government to offer just under 30% of its shares (or 5% more of the total issued share capital of the company) to the people of St. Kitts and Nevis,” said Prime Minister and Minister of Finance, Hon. Dr. Denzil L. Douglas.
Speaking at a signing ceremony on Friday, the St. Kitts and Nevis leader noted that the two-year negotiations were meticulous and tireless “to obtain the best possible deal for our people.”“Of course we had a major constraint because the Agreement that was negotiated with Cable and Wireless (and the PAM Administration of Dr. Kennedy Simmonds) prior to the assumption of office by my Administration, gave Cable & Wireless plc the right of first refusal in respect of any shares in Cable and Wireless (St. Kitts and Nevis) offered by the Government for sale,” disclosed Prime Minister Douglas.
He said that Government found that provision, which is also included in the Agreement in respect of The Cable, particularly onerous.
“As my Government has indicated on a number of occasions, we are committed to ensuring that our people are given priority in respect of the ownership of shares in privatized enterprises. But this particular provision that was negotiated by the previous Administration essentially gave priority to Cable and Wireless plc in respect of the purchase of Government shares,” said Dr. Douglas.
He said that Cable and Wireless acted quite responsibly and demonstrated great sensitivity to the needs of our people.
He disclosed that under the Sales Agreement, Cable and Wireless (West Indies) Ltd would purchase the 5,640,230 shares of the Government at a price of approximately 6.41 per share or $36,221,534 in total, but would immediately commence the process of listing 5% of the share of Cable and Wireless (St. Kitts and Nevis) Ltd on the ECSE.
“It is expected that after the listing shares held by the people of St. Kitts and Nevis in Cable & Wireless (St. Kitts and Nevis) Ltd. would increase from 18% to 23%,” Dr. Douglas said.
He said: “Although we expect immediate action in respect of the listing and offer of the shares to the public, out of an abundance of caution, we have provided that under no circumstances, the process should go beyond a year.”
“The Agreement also provides that the shares would be offered at a discount. Hence, although Cable and Wireless (West Indies) purchased the shares from the Government at a price of $6.41 each, it would be required to make them available to the public at $5.00 per share, plus the usual transaction costs,” said Prime Minister Douglas, who pointed out that “this arrangement is consistent with Government’s strong commitment to ensuring that our people are truly empowered through the ownership of the critical assets in this Federation.”
“We recently made provision for some 5000 persons to acquire land at a discount and we are now enabling our people to purchase shares in Cable and Wireless, one of our very longstanding, reputable and profitable companies, at a discount,” he told the ceremony, which was attended by Minister of State in the Ministry of Finance, Sen. The Hon. Nigel Carty; Chief Executive Officer of Cable & Wireless (St. Kitts & Nevis) Limited, Ms. Patricia Walters; outgoing Board Chairman, Mr. Joseph Edmeade and Head of the Privatisation Unit, Mr. Halva Hendrickson.