The Government of Belize and the previous owners of BTL have arrived at a settlement on the company. It has been an issue that has spanned about six years. Prime Minister Dean Barrow flanked by the Executive Chairman of Telemedia, Net Vasquez and Financial Secretary, Joseph Waight made the announcement.
“We have reached an agreement with the former shareholders of BTL, the employees trust and with British Caribbean Bank limited. I use the description that I just employed advisedly because Lord Michael Ashcroft has always insisted that he doesn’t have any financial interest in BTL. I am prepared to take that at face value but in the interest of full disclosure he was the person with whom I negotiated but he was doing this according to his words to me ” as a sort of good Samaritan” on a kind of “pro bono” basis. Ink was put to paper last Friday and tomorrow we will take to the House, a bill for an Act to appropriate further sums of money in order to pay compensation and we will also take the Telecommunications Acquisitions Act 2015.”
In 2009 the Government nationalized the company, acquiring both shares in Telemedia and a loan from British Caribbean Bank that the company received prior to its nationalization. The previous owners took the Government to court and the matter ended up at the Caribbean Court of Justice. The CCJ had indicated that it would hand down its ruling in its next session that begins in October, however that is now a moot point, since a settlement was reached. The original loan was for twenty two point five million US dollars. The Prime Minister said the total sum of the loan would be paid by Government in the first instance and BTL will repay the Government. He explained how the payments will work out.
“$48.5 million dollars will be raised by way of government’s issue of these treasury notes. Central Bank naturally buys the treasury notes, gives us the $48 million dollars on-sells and there will be a queue liquidity, market conditions is such that there will be a queue for people who will want to buy the treasury notes from the Central Bank. The good BTL will service those treasury notes. So in terms of that $48 million dollars it costs the government nothing, not even immediately. Central Bank gives us the money they un-sell in the normal course then it is our obligation to service the interest to those who have bought the notes and who hold the notes, if anybody wants to redeem that would be our obligation, we don’t think that’s likely; we expect to roll over notes but bottom line is though that === and BTL will take up the servicing of the treasury note, so it costs government nothing. The balance of the money that we have to pay under the award to BCB will again be a mix since it is ultimately for BTL, they are finding $10 million dollars in cash and so that will be used to pay a portion of the balance; 15 million dollars in dividends that BTL has for government that were frozen by the CCJ will be used to add to that 10 million. So we are getting $25 million from BTL, ten of which is their own money, fifteen of which belongs to us and then the additional $19 million or so we are getting from PetroCaribe.”
He went on to say compensation for the shares acquired is a bit more complicated.
“We are pre-paying on the award that the Tribunal will make, we are prepaying at the NERA value because we are saying that is all we can concede. If we win this prepayment, will in fact mean the entirety of the payment and the end of the story but if the tribunal finds that the correct valuation is in excess of the NERA valuation, at which rate we are paying from now, we are agreeing to pay the difference between the NERA valuation which we are prepaying and the amount that the tribunal would have awarded. There is an additional wrinkle – the Ashcroft interest in front of the tribunal in making their case to support the value that they claim include an element of valuation in their formula to take account of the Accommodation Agreement. Now you know we’ve resisted that Accommodation Agreement and in fact they already got an arbitration award against us for breach of the accommodation agreement which we have not yet paid and which I will not pay and that is not part of the settlement because I am not going to pay that, notwithstanding that there is an enforcement order in the US and I’ll tell you in a minute how and why I don’t have to pay but in terms of the arbitration tribunal if the value that it awards does include an element for the accommodation agreement I’ve negotiated so that that portion will be separated out and will be described as the restricted amount. Apart from the restricted amount I will pay to the previous owners of BTL, the previous shareholders, what the tribunal orders and I will pay that in US dollars. The restricted amount will be paid in Belize dollars and will have to be spent in Belize on charitable projects for the good welfare and well-being of the people of this country such projects to be identified to the trust that gets the restricted amount by the government of Belize.”
When added up, according to the Prime Minister, the cost of the settlement is one hundred and sixty two million, seven hundred thousand dollars.