Cable & Wireless Communications believes the best way to fix its struggling Caribbean business is to acquire a large stake in the region's largest service provider Bahamas Telecommunications (BTC).
Set to be completed in Q1 2011, C&W signed a non-binding memorandum of understanding with the Bahamas government, which owns BTC, to purchase a 51 percent ownership in the service provider.
Now, C&W and the Bahamas government will now have to sort through necessary terms and gain customary regulatory clearances.
Cable & Wireless Communications, whose primary focus is on the Caribbean wireline market, has been struggling ever since the former Cable and Wireless plc separated the company into two entities: Cable & Wireless Communications and Cable & Wireless Worldwide. According to a Bloomberg report, CWC's Caribbean sales dropped 6.1 percent while EBITDA dropped 13 percent in the first half of this year.
Tony Rice, CWC's CEO, said the acquisition could give CWC a much needed revenue boost. "BTC represents a great opportunity to expand our business in a region where we have competitive strength and management capability," he said. "This opportunity would fit with our strategy to develop the CWC business through market leading and cash generative businesses."
However, it appears that the stock market liked its move to acquire a stake in BTC as its shares were up about 3.6 percent in London trading.
- see the release
- Bloomberg has this article
SingTel considers bid for Cable & Wireless Worldwide
Rumor mill: AT&T could move to acquire C&W Worldwide
Cable & Wireless to put demerger back on table