Cable and Wireless Communications Plc (CWC) is entering three new markets and deepening its business in Panama via its acquisition of Grupo Sonitel, an IT and telecoms business. CWC, a telecoms company which operates as LIME in Jamaica and other Caribbean countries, announced earlier this week that it had acquired the Panama-based Grupo Sonitel for US$36 million. There is an additional contingent consideration of up to US$5 million more. The purchase was made through the CWC subsidiary Cable & Wireless Panama, S.A. (CWP) and includes two Grupo Sonitel companies - SSA Sistema and Sonset. SSA Sistemas is a provider of end-to-end managed IT solutions and telecoms services to business and government customers in Panama. The acquisition also allows CWC to enter the business-to-business (B2B) markets in El Salvador, Peru and Nicaragua. Sonset is a provider of IT solutions and services to small- and medium-enterprise customers in Panama. The purchase does not include non-core Grupo Sonitel companies, such as Logistica, which is an IT hardware reseller. "This transaction is in line with the strategy we outlined in May to grow our business (B2B) and government (B2G) capabilities," Phil Bentley, CEO of CWC, said in a news release. "Adding more than 350 IT software and telecoms service engineers to our team will considerably boost our capabilities in this field," he said. Julio Speigel F., who has worked with Grupo Sonitel for 20 years and serves as executive vice-president, is to continue to lead the business. "With our customers and team in mind, joining Cable and Wireless Communications was the best choice to secure the future of Grupo Sonitel," said Julio Spiegel R., who is president of Grupo Sonitel and has worked at the company for 44 years. "By bringing together CWC's communications and network capabilities with Grupo Sonitel's hosted solutions and IT expertise, we will be able to deliver an unbeatable offer to our customers," he said in the statement. Grupo Sonitel was established in 1957 and employs more than 350 people. Its vendor certifications include being a Cisco Gold Partner, Oracle Platinum Partner, VMWare Enterprise Partner, and HP Platinum Partner. For the year ended December 31, 2013, the businesses included in the CWC transaction had revenues of US$77 million from continuing operations. Cable & Wireless Panama is jointly owned by Cable & Wireless Communications, 49 per cent, and the Government of the Republic of Panama, 49 per cent. The other two per cent is held in trust on behalf of the employees. CWC has both management and board control. Outside of fixed, mobile and broadband services in Panama, CWP is also a major supplier of pay TV and enterprise services.
15 Aug '14
The Bahamas Weekly
The Bahamas Weekly writes that the Bahamian Government and Cable & Wireless Communications (CWC) have completed the controversial ‘2% deal’, whereby CWC has transferred ownership of just under 2% of the shares in Bahamas Telecommunications Company (BTC) to a charitable trust set up by the government of Bahamas – the BTC Foundation. As part of his election campaign in 2012, PM Perry Christie pledged to return BTC to Bahamian ownership, after the previous administration sold a 51% stake in the fixed line incumbent and sole provider of wireless services in the archipelago to the UK’s CWC for USD210 million. To that end, the government has been involved in negotiations with CWC to reclaim majority ownership of the provider and in January 2014, the PM announced that an agreement had been reached. Under the now-completed deal, CWC transferred 5,093,200 shares in BTC to the new foundation, which will invest in Bahamian interests. The nearly-2% stake is not entitled to any voting rights, leaving CWC with majority voting rights as the largest overall shareholder and allowing CWC to consolidate BTC’s financial results. Further, CWC will also retain management and board control. The deal has been roundly criticised for wasting money on a ‘face-saving’ measure for the Christie administration, the end result changing little for CWC or BTC, but allowing the government to claim that it has met its election promises. Speculation that the government would consider extending BTC’s monopoly on wireless services in exchange for the 2% proved ungrounded, although the government has remained tight-lipped on the amount paid to CWC for the shares. Further, prolonged delays and the absence of any mention of the deal from CWC’s financial report led to accusations that the PM had lied about the agreement.
1 Aug '14
Money where my mouth is ...
I've expressed a positive view of this share previously and today I bought more.
31 Jul '14
Why is no one making an offer?
At this price I would have thought that CWC would make an attractive take over even without the ongoing restructuring. Healthy cash position and decent dividend. Disclosure: I own shares in CWC
I last bought in at around 45p and sold about 18 months later at 54p. With the divis on the way it was a healthy profit. I was reluctant to sell at the time but needed the money. I still think T/O is a real possibility but who knows when. I've only bought a small amt this time and aim to top up at intervals. I've set a stop loss at 40p and will renew that every month. I'm happy to give this 2 years and keep the divis as compensation. I have to admit I know very little about telecomms or the markets CWC operates in. My late father always had Cable and Wireless in his portfolio and he was a cautious investor. I've been in and out a few times in the last decade (even prior to the CW/CWC breakup) and have never lost money yet....of course , there's always a first time........
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