Cabinet to consider Chinese Co. bid for Govt share in GT&T – Ramjattan
JULY 26, 2011 | BY KNEWS | FILED UNDER NEWS
Cabinet is set to consider, today, a proposal by a Chinese company to purchase the 20 per cent stake Guyana has in the Guyana Telephone and Telegraph Company (GT&T). The shares which have been raking in between $200M to $800M annually in profit since 2000 were placed on the market more than a year ago. Sources said that the Chinese company made a proposal to buy the shares for US$30M ($6B) under three phased payment structures.
NICIL is supposedly recommending the payment option that sees the Government receiving the largest sum upfront – some $25M and apparently the Government is set to take that option.
Late last year, the government’s National Industrial Commercial and Investment Company Limited (NICIL), had not found favour with the public bids it received during an earlier request for proposals for the purchase of the shares. NICIL again invited proposals from interested firms/individuals to purchase Government’s 20 per cent “en bloc” shareholding in GT&T. According to the invitation which is posted on the government eprocure.gov.gy website, “GT&T is 20 per cent owned by the GoG via NICIL and 80 per cent owned by Atlantic Tele-Network, Inc. (ATN), a publicly traded telecommunications company, headquartered in Salem, Massachusetts.” Atlantic Tele-Network (ATN) at its recent Board of Directors meeting declined to purchase the shares.
Since 1991, government received zero dividend payment, a statement said. It was not until in 2000, when the tax holiday ended, that the annual dividend began to be paid. This amount has fluctuated from US$1M and US$4M, while the company has been reporting impressive profits over the same time, the government said. The Government of Guyana had placed the shares on the market and according to a senior official the lack of interest by persons to purchase the shares is as a result of the administration’s own fault. In 2008, the government collected $1.5B in taxes from the company and $265M in dividends.
The Office of the President subsequently stated that the decision to dispose of the minority shareholding was based on the fact that the government’s directors have consistently been prevented from exercising any influence, whatsoever, on the affairs of the company. Head of the Privatisation Unit, Winston Brassington, during an interview with this newspaper on May 8, last, stated that the telephone company’s financial status is excellent, making it a prime time to sell its shares.
Presidential Candidate of the AFC, Khemraj Ramjattan who serves as a legal advisor of the company, provided a corroborating story to this newspaper. “We find it outrageous that there has been no disclosure of the open tender process having been closed and that there has been a stealthy privatization of Government assets.” He said that this company has provided tremendous benefits to the Guyanese people and has yearly been adding to the country’s coffers yet the PPP Government is choosing to sell off an income generating asset. Ramjattan opined that the government wanted the money in lieu of the Norwegian funds which it has been unable to get up until now. He claimed that the government needed the monies to fund its “elections splurge”.
Source
JULY 26, 2011 | BY KNEWS | FILED UNDER NEWS
Cabinet is set to consider, today, a proposal by a Chinese company to purchase the 20 per cent stake Guyana has in the Guyana Telephone and Telegraph Company (GT&T). The shares which have been raking in between $200M to $800M annually in profit since 2000 were placed on the market more than a year ago. Sources said that the Chinese company made a proposal to buy the shares for US$30M ($6B) under three phased payment structures.
NICIL is supposedly recommending the payment option that sees the Government receiving the largest sum upfront – some $25M and apparently the Government is set to take that option.
Late last year, the government’s National Industrial Commercial and Investment Company Limited (NICIL), had not found favour with the public bids it received during an earlier request for proposals for the purchase of the shares. NICIL again invited proposals from interested firms/individuals to purchase Government’s 20 per cent “en bloc” shareholding in GT&T. According to the invitation which is posted on the government eprocure.gov.gy website, “GT&T is 20 per cent owned by the GoG via NICIL and 80 per cent owned by Atlantic Tele-Network, Inc. (ATN), a publicly traded telecommunications company, headquartered in Salem, Massachusetts.” Atlantic Tele-Network (ATN) at its recent Board of Directors meeting declined to purchase the shares.
Since 1991, government received zero dividend payment, a statement said. It was not until in 2000, when the tax holiday ended, that the annual dividend began to be paid. This amount has fluctuated from US$1M and US$4M, while the company has been reporting impressive profits over the same time, the government said. The Government of Guyana had placed the shares on the market and according to a senior official the lack of interest by persons to purchase the shares is as a result of the administration’s own fault. In 2008, the government collected $1.5B in taxes from the company and $265M in dividends.
The Office of the President subsequently stated that the decision to dispose of the minority shareholding was based on the fact that the government’s directors have consistently been prevented from exercising any influence, whatsoever, on the affairs of the company. Head of the Privatisation Unit, Winston Brassington, during an interview with this newspaper on May 8, last, stated that the telephone company’s financial status is excellent, making it a prime time to sell its shares.
Presidential Candidate of the AFC, Khemraj Ramjattan who serves as a legal advisor of the company, provided a corroborating story to this newspaper. “We find it outrageous that there has been no disclosure of the open tender process having been closed and that there has been a stealthy privatization of Government assets.” He said that this company has provided tremendous benefits to the Guyanese people and has yearly been adding to the country’s coffers yet the PPP Government is choosing to sell off an income generating asset. Ramjattan opined that the government wanted the money in lieu of the Norwegian funds which it has been unable to get up until now. He claimed that the government needed the monies to fund its “elections splurge”.
Source
