LIME signs MOU to buy 51 percent of Bahamas Telephone Company

Cable & Wireless Communications plc. (CWC), the parent company of LIME,  announced that it has signed a non-binding memorandum of understanding (MOU) with the Government of the Commonwealth of The Bahamas (Government) to acquire a 51 percent interest in the Bahamas Telecommunications Company (BTC).

BTC is wholly-owned by the Government and is the exclusive mobile operator in The Bahamas, as well as a leading provider of fixed-line and broadband services.

LIME is the leading full-service telecommunications provider in the region.

CWC and the Government will now work together to complete due diligence, finalise contractual terms and obtain necessary consents and other regulatory clearances with the aim of completing the transaction in the first quarter of 2011.

Included in the MOU are:

*    CWC will acquire the majority equity stake in BTC, including management control of the business, for US$210 million.
*    BTC will enter into agreements with CWC for the provision, on an ongoing basis, of various support services, branding and use of intellectual property.
*    The liberalisation process for the mobile sector will commence no sooner than three years after completion of the transaction.
*    CWC will work with the Government and the management of BTC to develop a business plan for BTC, addressing its plans for the modernisation of telecommunications throughout The Bahamas and for the development of BTC following privatisation.

Speaking on behalf of LIME, Chief Executive David Shaw commented: “We believe there is a solid strategic fit between LIME and BTC with many possibilities to build the customer experience and The Bahamas community.  If successful, this transaction can deliver a new era of innovative services like mobile TV and high-speed broadband in The Bahamas.  This MOU is a positive first step.  The due diligence will now provide a fuller understanding of BTC operations and the concerns of its stakeholders – which is the right way to start and a big part of getting to know the flavour of The Bahamas.”

Tony Rice, CWC’s Chief Executive added “We are pleased to have taken this important step in the process to invest in The Bahamas, a dynamic economy and market with great potential.  In partnering with the Government, we believe that we can deliver a world-class telecoms capability to the people and businesses of The Bahamas.  Our immediate focus is now on finalising terms and completing this transaction.”

About BTC

BTC is the exclusive mobile operator in The Bahamas, as well as a leading provider of fixed-line and broadband services. For the year ended 31 December 2009, BTC had total revenues of US$361 million, EBITDA US$101 million, operating cash flow of $48 million and net income of US$48 million. The company currently has approximately 123,000 fixed line customers, 392,000 active mobile customers and 19,000 broadband customers.