After a few marathon meetings between Prime Minister of Belize, Dean Barrow and Billionaire Lord Michael Ashcroft, the Government of Belize announced today that they along with former shareholders of the Belize Telemedia Limited being Dunkeld International Investment Limited, The Employees Trust and the British Caribbean Bank have agreed to a settlement in the telecommunications company.
GOB says that at the time of acquisition in 2009, Dunkeld (through various holding companies) held 71.2% shares in BTL, and the BTL Employees Trust (through its holding company, Sunshine Holding Limited) owned 23% shares. Viewers may recall that in orders from 2009 and 2011, the Government also acquired British Caribbean Bank’s interest and rights in certain loans and securities.
Particularly, the Government acquired a mortgage to BTL in the sum of US$22.5 million that both the Government and BTL contend was illegal. The Bank challenged the acquisition and commenced arbitration under the 1982 Bilateral Investment Treaty between the Government of the United Kingdom and the Government of Belize for the promotion and protection of investments. On December 19th, 2014, the Arbitral Tribunal ruled in favor of the bank and ordered the Government to pay compensation.
Today the Government announced that as part of the settlement, the Government shall pay the bank over $48 Million US dollars representing compensation, including costs, expenses and interest.
But according to the PM’s presentation today at the Biltmore Plaza, ink was put to paper last Friday and tomorrow a bill for an act to appropriate extra sums of money to pay compensation will be billed.
The PM says financing for initial partial payments to Dunkeld and to the BTL Employees Trust will come from monies held on deposit arising from the sale of BTL shares in 2010. Financing for the settlement with the British Caribbean Bank will come from dividends and contribution due from BTL from the sale of additional Treasury Notes; and from PetroCaribe funds. Here is how the PM explained the essential features of the settlement today.
Honorable Dean Barrow – Prime Minister of Belize
“In order to settle this matter, to have the former shareholders acknowledge once and for all that BTL is now and forever more the property of the government and people of Belize. We will pay the award that the tribunal issued in the BCB matter. Others words, we will not any longer seek to skip and jump and dodge and run and postponed the inevitable for another day while interest continues to run. So we will pay that 48 million US dollars and settle the BCB award. So forty-eight point five million dollars will be raised by way of government’s issue of these treasury notes. Central Bank naturally buys the treasury notes and gives us the forty-eight million dollars on sales and there is a huge, there’ll be a queue. Liquidity is such, market conditions are such that there will be a queue for people who would want to buy in turn the treasury notes from the Central Bank. The good B.T.L. will service those treasury notes so in terms of that forty-eight million dollars, it costs the government nothing, not even immediately. Central Bank gives us the money, they on sell in the normal course then it is our obligation to service the interest to those who have bought the notes and who hold the notes. Since it is ultimately for B.T.L., they are finding ten million dollars in cash and so that will be used to pay a portion of the balance. Fifteen million dollars in dividends that B.T.L. has for government that were frozen by the CCJ will be used to add to that ten million. So we’re getting twenty-five from B.T.L., ten of which is their own money, fifteen of which belongs to us and then the additional nineteen million or so, we’re getting from, you guessed it, Petrocaribe.”
The PM says that both BEL and BTL have been performing splendidly under a Board of Directors appointed by GOB and that the nationalization of both essential utility companies is a testament to the Governments “unshakeable philosophical conviction” that these companies must be owned by the people and the Government of Belize.