Saturday, September 18, 2010

BTL to stay a PRIVATE COMPANY controlled by government.


The latest article on the developments with the BTL company, nationalized from an Englishman, who controlled it last year, because he was bankrupting the small government of ours with nuisance lawsuits seems to be clearing up. The fog of establishing net worth, market size, assets, future projected earnings is ongoing and it is a painful experience to see amateurs deal with the intricacies of handling this NOW PRIVATE COMPANY.
The main player is the current UDP Party Leader, Prime Minister of the country of Belize and also retaining the portfolio of Minister of Finance, Mr. Dean Barrow. This is very much a ONE MAN show. The puppet being played as proxy is one UDP political party hack, called Nestor Vasquez, as Chairman of the Board of BTL. The Board of Directors of BTL is stacked with party hacks and relatives of the Prime Minister, is the impression articles in the newspapers give. A bunch of freeloading fee ridden parasites.

According to the Amandala newspaper article, there is already more than one CONFLICT OF INTEREST. Nestor Vasquez is not only the appointed Chair of the Board of Directors of BTL, but also is Chairman of the UDP Government investment branch, of the Investment Division of the Belize Social Security Board. The UDP government is carefully controlling the sale of the shares it is rumored. The impression is; that the Social Security Board interest is cloaked with smoke and mirrors, and political hype, but ALL street persons know this is a done deal, as far as our patrimony in social security funds. The question is; are the UDP looting the Social Security funds at the expense of citizens, particularly seniors? Seniors need about $600 a month to barely live and are rumored to get about $75 bz. Without the 15% guarantee in dividends, the alternative is an offer by the Prime Minister announcing that; 45% of the net profits of the private company will be paid out in dividends to shareholders. Since the Government of Belize had to subsidize the past Englishman with millions of dollars out of the GENERAL FUNDS of the revenues to pay him his guaranteed dividend of 15%. Future shareholders in BTL will certainly be curious at estimated net profits and numbers of shares being issued in the re-structured telecommunications company. You divide one by the other to find your return on capital investment. It is believed from published quarterly bank reports that the Social Security Board gets about 9 1/2 % interest on Bank, Certificate of Deposits. So as far as a genuine interest by the Social Security Board in BTL shares, they would have to get better than that to be proper and fundamentally sound? More like 12% to 16%. Is the net profit there is the question? From the past Accommodation Agreement and the guaranteed subsidized dividend payments under the Englishman, past controlling owner, it is doubtful? In the past, net profits for BTL were quoted in the newspapers to average about $30 million a year. Though around $70 million a year were looted from the company on various financial subterfuges the newspaper articles hinted at. Mostly through lending money back to itself through SHELL companies in offshore locations. Nobody knows how many shares in BTL are out there?

The theory espoused of PM Dean Barrow, is that no foreign investor can own more than 25% of the shares in BTL. The government itself will control the voting control of the Board of Directors of BTL. The valuation of the shares of this PRIVATE COMPANY has been quoted in newspapers as $300 million by the Prime Minister. On the street, rough estimates put the value of the company between $35 million and $60 million. This includes physical assets, customer base and good will.
Two foreign investors have supposedly expressed interest in BTL. The company was looted by the previous controlling owner, an Englishman ( now a major player in the UK government ) and also by the controlling owner before that, one American. The major asset in the past was an Accommodation Agreement between the last Prime Minister in which the Government subsidized BTL, with a guaranteed 15% return, and any shortfalls in this amount were met by millions of dollars from the government of Belize. The Englishman was noted as manipulating the political parties during election campaigns according to the newspapers on the subject. The funding of political party election campaigns was used in a corruption campaign contribution system, using BTL funds via pseudo shenanigans is the impression given.

The Amandala article states that there are about 10,000 existing small Belizean shareholders in the company BTL. The situation has changed for telecommunications in Belize. The biggest problem facing Belize is affordable internet service with modern high speeds and bandwidth to hasten entrepreneurial development through the rural entrepreneurial areas. At the moment there are three companies providing such services in scattered locations. These are SMART, owned or controlled by the aforesaid Englishman which gives internet service in competition with BTL and also in areas such as mine in Santa Elena Town, with 22 year old technology, speeds and bandwidth. 115 kbps per second. It takes about 9 hours to download my own business program and there are huge swaths of the computer software I cannot use with such low speeds and bandwidth. The other competitor is the CABLE TV company who has bought up the competition for cable TV in the industrial and population belt running from the Port Town on the East coast of Belize to the Western Twin towns along the Western Highway and off to the sides, some 30 miles both North and South of the Western corridor. We await the arrival of this internet service. It is very high priced. The existing Cable TV coaxial cable had to be replaced for internet provision. The owner is reported as reinvesting as he earns it. The other player is the old colonial telephone company, now called BTL. Now controlled by the government, nationalized and being divested to raise money to pay for the nationalization. It has been a monopoly almost all of it´s existence.

An Irish company in telecommunications throughout the Caribbean has been over to look at the assets of BTL. They are interested in investing, but the government has announced they cannot own more than 25%. The rumor hints that a Mexican company is also interested. On the borders, most internet is provided to border towns from Guatemala companies and Mexican telecommunications companies. I wish I lived closer to the borders. My internet service is inadequate but all that is available. The price is fair though, but not the speed and bandwidth.

The latest announcement is that the sale of shares to the public is postponed again, an ongoing process, the latest being now OCTOBER, 2010. That is unlikely as there is as of yet, no Annual Report to peruse, nor prospectus for BTL. At least I have been unable to get any. Nor have queries to BTL resulted in any. Complicating matters is the subject of resale of shares under the current articles and by laws of the company. The Government is announcing a wholesale replacement of the old Articles and Memorandum of the company will be made and this will not come out and replace the existing setup until November. One doubts any large investor will invest until getting these documents. Me included! The current interested foreign buyer of shares in BTL which is DIGICELL, had to sign a NON DISCLOSURE AGREEMENT with BTL and the government. So SECRECY of the actual situation in BTL remains a sore point with anybody trying to investigate the fundamentals of the company. We are obviously going to be fed a bunch of government hype as in a sales pitch is the impression. Due diligence is limited. This is not a PUBLIC COMPANY, but a PRIVATE COMPANY.

1 comment:

Avg.Joe said...

nice read...
i like your blog a lot