SXMElections.com

~ Board of Commissioners gives negative advice on sale ~

WILLEMSTAD/PHILIPSBURG--The United Telecommunication Services (UTS) Supervisory Board is advising shareholders – St. Maarten and Curaçao – not to split the telecommunications company and not to sell UTS Eastern Caribbean, especially not now during the parent company's search for an international strategic partner.

The board came to its conclusion on Thursday, February 26. Curaçao and St. Maarten shareholder representatives Ministers Earl Balborda and Dennis Richardson and members of management were notified by letter the following day.

"Unsolicited advice. While it's good that the Supervisory Board is making its position known, both the board and UTS management need to understand that the shareholders decide this, and not them. The most important thing here is the security of some 600 jobs in Curaçao," Balborda said in an invited comment.

Supervisory Board President Kenneth Gijsbertha said the board had evaluated the situation concerning UTS during its regular meeting on Thursday. In doing so, the board took UTS' big picture into account, something Balborda also said a few weeks ago. "We also took a motion into account that was approved by Curacao's Parliament." The motion instructed Government to search for a strategic partner.

Gijsbertha further stated that the board had looked at efforts towards making UTS a financially and economically healthy company, such as voluntary dismissal and the selling of Uniqa in Suriname.

"UTS has had a good year; 2014 closed on a positive note in all aspects. The cash flow, loss, profit and EBITDA [earnings before interest, taxes, depreciation and amortisation – Ed.] all give a positive impression."

Therefore, Gijsbertha said the board had advised the shareholder not to split UTS and not to sell UTS Eastern Caribbean to St. Maarten. This is to allow the strongest possible negotiating position in the company's search for a strategic partner.

St. Maarten had already requested the handover of complete UTS Eastern Caribbean operations in 2012. At the same time, St. Maarten would hand over its shares in the parent company.

In doing so, the worth of UTS Eastern Caribbean activities would be estimated with the assistance of independent experts. An eventual settlement would take place in connection to the difference in value for the share-swap.

Minister Richardson, as stated in a press release issued on Friday, indicated that St. Maarten increasingly had gotten the feeling that there were important differences of opinion in relation to the development (i.e. in growth and investments) of UTS activities in St. Maarten and the rest of the Eastern Caribbean.

Balborda called the supervisory board's position "premature." He added that despite the advice, he was not yet convinced that all was well with UTS. "If you get a positive result one year, that does not mean that the company is healthy."

Balborda does not yet know what these positive numbers are exactly, because the supervisory board has not yet approved or sent out the annual accounts. However, he said the numbers were relative. "If a company worth 500 million makes a profit of 5 million, for example, ... that's a drop of water on a hot plate."

Balborda stressed that he still needed to receive UTS' big picture before he could make a decision on joining a strategic partner and possibly selling UTS Eastern Caribbean. This also would include the findings of consultant group BDO that has evaluated the company.

Curaçao's Council of Ministers still needs to discuss the findings, which do not paint a rosy picture on the company's functioning or that of the supervisory board, according to Balborda. He stressed that for him, the most important aspect was that UTS jobs are protected.

Balborda is staying calm under St. Maarten's pressure to sell UTS Eastern Caribbean. "That is their given right, but I am looking after the interests of the company and of the large group of employees in Curaçao."

In related news, the request by Smitcoms, TelEm's international telephony branch, for a mobile telecommunications licence in Curaçao that is not being given is a thorn in St. Maarten's eye. Theo Heyliger has been in Curaçao over the past days to discuss this, amongst other issues.

While Curaçao opened its telecommunications market and thus cannot deny Smitcoms this licence, its release in the short term is seen as dealing a possibly mortal blow to UTS.

UTS already faces competition from companies like Flow and Digicel, so yet another player on the market could translate to negative consequences for the company, which is not entirely financially stable.

Curaçao's Amigoe newspaper reported on Saturday that St. Maarten's telecommunications sector had said it was Balborda who had been refusing to issue the licence.

Balborda confirmed that he had seen Heyliger during the week for a cup of coffee, but said he had not discussed UTS or any related issues.