In my last post I warned about the looming crisis in Venezuela when nobody else was writing about it. Sadly, since then a lot of folks have woken up and smelt the coffee. The crisis in Venezuela has not yet quite reached bursting, but it is clear for all to see that this very ugly boil will pop very soon.
Today, though, I would like to leave that sad topic alone and concentrate on another storm that is appearing on our economic horizon. I am talking about Liberty Global, Cable and Wireless, Columbus Communications (Flow) and Massey Communications.
Let me explain: some six months or so ago Cable and Wireless (C&W) bought over Columbus Communications (Trinidad) Limited, the ubiquitous television cable provider in T&T. The Telecommunications Authority of Trinidad & Tobago (TATT) approved the deal but ordered that C&W do sell it's 49 percent shareholding in TSTT, the telephone company in which the State owns 51 percent.
In the meantime, 'back at the ranch', a huge American telecommunications giant Liberty Global (Liberty) bought over C&W making it, if not the largest, then certainly one of the largest telecommunications providers in the world. Liberty is big. Really big! And they have shown themselves not afraid to use their power in disputes with small states. Recently in a dispute with the Bahamas Government Liberty virtually brought that government to its knees ... but that's another story.
In any case, as you can imagine, there are few if any buyers who will want to or are capable of buying out C&W's 49 percent share in TSTT. One of the obviously big problems for any buyer is taking a minority share in a state enterprise. That buyer is going to have a lot of money tied up in a business which it cannot control. That's not exactly a recipe for a profitable investment.
Enter now from stage left Massey Communications Limited, a subsidiary company of the large billion dollar T&T conglomerate. Massey Communications is presently carrying on simultaneous talks with Liberty/C&W on the one hand and the T&T Government on the other to buy out all of the shares in TSTT. That's right: all!! And the Government is seriously considering this offer.
Well, you could argue that the taking over of TSTT by private enterprise wouldn't necessarily be a bad thing. But what if after the Government sells its shares to Massey and Massey buys C&W's shares then Liberty Global decides to make Massey an offer that it can't refuse for 100 percent of TSTT? Or even just decides to buy out Massey Communications Limited? There are a number of obvious permutations and combinations in this scenario.
Pay attention. It just could happen. And the open ended question is would this be a good thing for us?
Thursday, June 2, 2016
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