The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Telecommunications Company’s (BTC) two trade unions yesterday voiced fears the carrier will become “a shell company” as they accused its majority owners of “exporting” all its value.

Kenny Knowles, the Bahamas Communications and Public Managers Union’s (BCPMU) president, told Tribune Business he and his members are “somewhat troubled” after learning that all BTC’s 345 mobile tower sites are to be sold to a third-party, then leased back, via a deal concluded by its ultimate parent.

Liberty Latin America on Friday unveiled a deal with Phoenix Tower International, a Florida-based company, that will see the latter acquire 1,300 cell tower sites across six jurisdictions - including The Bahamas - in a $355m agreement. The two parties said the value could rise to $407m as Phoenix is to develop a further 500 cell tower sites, although the locations were not divulged.

Mr Knowles, though, questioned “what is the value of this relationship” with Liberty Latin America and its subsidiary and immediate BTC parent, Cable & Wireless Communications (CWC), for the Bahamian people given that so many functions and job/entrepreneurial opportunities have been outsourced outside this nation.

While Balan Nair, Liberty Latin America’s chief executive and president, denied that there were plans to sell and leaseback other telecommunications infrastructure, the BTC management union leader questioned if it would do similar with BTC’s valuable underwater cable network that connects to both the US and Haiti.

Mr Knowles’ concerns were echoed by Sherry Benjamin, the Bahamas Communications and Public Officers Union’s (BCPOU) president, who queried whether the terms of the Liberty/BTC deal also involve Phoenix acquiring the land on which the cell towers sit as well as the above-ground infrastructure itself.

While selling, then renting back, the towers was one thing, she argued that including the land was a step too far because The Bahamas is “giving too much of our assets away to foreign entities”. (see article on Page 1B).

Mr Knowles, meanwhile, urging the Government to state its position on the Phoenix deal, given that it holds a 49 percent ownership interest in BTC and four of the nine Board seats, told Tribune Business: “We’re very concerned. We’re actually somewhat troubled that this has been allowed to happen. We were not consulted on this. This was something just brought to our attention on Friday.

“This is very troubling, and really raising some questions as to what is the value of this relationship with CWC and Liberty Latin America as a result of the terms of this sale. It appears that they’re taking everything from the company and exporting it.

“It appears that all the value of this company, built by Bahamians for Bahamians, and which has 49 percent ownership by the Government and Bahamians, it appears Liberty Latin America has offered to sell the value of this company to foreign entities”.

Questioning which BTC assets and functions will be next, Mr Knowles added that if the trend continues the carrier, at the end of this, will look like a shell company”. Liberty Latin America, in announcing the Phoenix deal on Friday, said it was part of a bid “to monetise approximately 1,300 mobile tower sites across” Panama, Jamaica, Puerto Rico, Barbados and the British Virgin Islands (BVI) as well as The Bahamas.

Given its archipelagic nature, The Bahamas’ 345 sites account for 26.5 percent - more than one-quarter, or one out of every four sites - included in the deal. “The transaction also provides advantageous arrangements to extend coverage with a further 500 sites being built by Liberty Latin America and PTI (Phoenix) over the next five years,” the former said.

“Inclusive of these commitments the total proceeds increase to $407m. Net proceeds are expected to be used to reduce debt and further invest in the company’s businesses.” It is unclear how many of the extra 500 mobile tower sites will be built in The Bahamas.

Liberty Latin America, in unveiling the Phoenix transaction to financial analysts alongside its 2023 third quarter results, confirmed its affiliates will lease the towers back via 15-20 year agreements. It added that the transaction will take between three to six months to close.

Balan Nair, Liberty Latin America’s president and chief executive, said the carrier is not seeking to “monetise any other infrastructure” beyond the cell towers at this point. “We know, of course, we will be very opportunistic but no, that’s not what we’re looking at,” he added, also disclosing that no other cell site towers will be included.

“We are very pleased to have announced an agreement with a high quality partner in Phoenix Towers that crystallises the value of approximately 1,300 of our mobile towers and infrastructure assets at a very attractive cash flow multiple,” Mr Nair continued.

“We will enter into a long-term lease agreement with Phoenix upon closing which will enable us to continue to deliver leading mobile services to our customers and our support network expansion, including further 5G deployment plans across the Caribbean and Latin America. We anticipate using the transaction proceeds to reduce third party debt and buy back shares.”

Dagan Kasavana, Phoenix Tower International’s (PTI) chief executive, said: “Phoenix is excited to partner with Liberty Latin America and expand its presence in the Caribbean and Panama. This transaction strengthens PTI’s presence in existing markets while representing new market expansion for PTI in the markets of The Bahamas, BVI and Barbados.

“As the largest independent owner of wireless towers in the Americas, we look forward to enhancing wireless access in these markets by serving all our wireless customers and the populations of the region with better connectivity and solutions to help our business partners achieve their goals. We appreciate greatly the hard work of both teams to consummate this fantastic transaction.”

Phoenix, a privately-owned company, was formed one decade ago in 2013 and is backed by investors which include The Blackstone Group. Its goal is to own and operate wireless (cellular) infrastructure around the world.