HAMILTON, Bermuda, Thursday February 24, 2011 – Cable & Wireless Communications (CWC) is selling its operations in Bermuda to a family-run Canadian cable and telecommunications company in a US$70 million deal.
Once the sale to The Braggs Group gets government and regulatory approvals, it’s expected to be finalised by the end of next month, at which time the new owners say they’ll keep the same employees and local management.
“In fact, we expect to increase local Bermudian employment in the near future,” it said in a statement yesterday.
News of the sale comes two weeks after CWC reported that its Caribbean operations continue to suffer, at the same that it announced it had signed the final agreement to acquire majority control of Bahamas Telecommunications Company Ltd (BTC).
CWC Chief Executive Officer Tony Rice said the Bermuda divestment is consistent with his company’s strategy to reshape its portfolio and develop the business around full-service telecommunications operations in a series of core regional hubs.
“Bermuda does not fit our business model as it is not a full-service operation while BTC provides excellent opportunities and a strong strategic fit with our Caribbean business,” he said in the statement announcing the divestment to The Bragg Group. “The US$70 million consideration represents an excellent return on our long-term investment in Bermuda.”
Rice said the developments in Bermuda and the Bahamas together represent the first steps in reshaping the CWC group as outlined at the time of the demerger last year.
Cable & Wireless Bermuda, which is part of CWC’s Monaco & Islands unit, is an international gateway business providing data capacity, carrier, internet and International Direct Dialling calling services. It also provides data centre and disaster recovery services to the corporate community, and partially owns alternative local network provider Quantum Communications Ltd.
CWC also owns stakes in two international cable systems which land in Bermuda that are operated separately and not part of the transaction.
The Bragg Group’s purchase of the Bermuda business marks the first time the Nova Scotia-based company has expanded its telecom business beyond Canada, according to reports in Canadian media.
The company is a cable and telecommunications provider, operating under the Eastlink brand.
Chief executive officer at EastLink, Lee Bragg, said this first step outside of the Canadian marketplace offers lots of possibilities.
“Apart from being an excellent investment that we expect will provide growth opportunities for many years, there are natural synergies between Nova Scotia and Bermuda,” he said.
“I expect our new relationship with Bermuda will lead to many other business opportunities for our company both in Bermuda and in Canada.”
Ann Petley-Jones has been named CEO of the Bermuda operations.
Along with the sale of the Bermuda business, CWC yesterday announced an on-market share buyback programme of up to US$100 million in order to return capital to shareholders.
“The share repurchase programme of up to US$100 million is consistent with our policy to seek the best opportunity for increasing shareholder value with the Group’s available cash resources. I am pleased that we are developing our portfolio management approach in tandem with our progress in developing the businesses,” CEO Rice said.
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