Jamaica Gleaner
Published: Wednesday | April 29, 2009
Home : Business
We are not for sale! LIME, Flow deny Columbus talks

Michelle English, chief executive officer of Flow.

Executives of Columbus Communications, the regional fixed-line telephone, Internet and cable television business in which Jamaican billionaire Michael Lee Chin is a minority partner, are adamant that the company is not up for sale.

And regional telecoms carrier LIME has moved to douse speculation that surfaced at the weekend that the Cable and Wireless Caribbean operation had joined the list of bidders interested in the Barbados-based business.

At least one local electronic media house reported recently that America Movil, the Mexico-based parent company of Claro, the mobile phone network that recently entered the Jamaican market, had acquired the fibre-optic cable business for approximately US$260 million. The report was apparently based on similar reports out of Mexico.

A Wednesday Business story carried earlier this month also alluded to reports of Claro's interest in the Columbus regional infrastructural footprint but, in the absence of any confirmation, reported no such deal.

Columbus operates in Jamaica as Flow.

Not being sold

"Flow is not being sold and I certainly would be aware of it," was the flat denial from Flow Jamaica's president and chief operating officer, Michelle English.

"No discussion was held with anyone, Flow is not for sale."

The comment from LIME is as unequivocal.

"Nothing of the sort, something so sensitive I would be aware of," LIME's vice-president of corporate communications, Errol Miller, told Wednesday Business this week.

Lee Chin's stake

Lee Chin has pledged his stake in Columbus, along with other assets, as collateral for a US$170 million debt to bond holders. At a meeting in Kingston earlier this month with Jamaican investors in the AIC Barbados bond issue, Lee Chin said steps were being taken to monetise AIC Barbados' stake in Columbus to pay off the debt.

AIC Barbados has put the value of its holding in Columbus at around US$300 million. It is unclear whether this includes investments held by AIC's Caribbean Bond Fund, led by Lee Chin, or if the bond fund could be the entity looking to purchase the billionaire's Columbus shares held by his Portland Holdings.

AIC's Caribbean private equity fund is jointly financed by entities such as the US government's Overseas Private Investment Corporation, the European Investment Bank, the Export Development Corporation of Canada, the Caribbean Development Bank and the pension fund of the US telecoms giant, Verizon.

AIC's Caribbean point man, Robert Almeida, head of AIC Global Holdings, has pointed out that Lee Chin's investments, and those of the Caribbean Fund, are managed separately and are not one and the same.

In 2004 Chin teamed up with investor, John Risley to form the Brendan Paddick-run Columbus, whose core operating business is providing cable-television services, high-speed Internet access, digital telephone and internet-infrastructure services (retail) and the development of an undersea fibre-optic cable network, as well as the sale and lease of the telecom capacity provided by the network. Risley is the chairman and majority stakeholder of Columbus.

"As far as we know, Michael Lee Chin is a minority shareholder in Columbus Communications and is entitled to do what he wants with his shares. Flow is a strong company that is growing every day and it continues to provide broadband and digital services to its growing customer base." Flow Jamaica's English added.

Strong impact from Flow

Flow has already made a strong impact on the local telecommunications industry, its integrated triple play of services - digital cable TV, digital landline and high-speed Internet - placing Jamaica as a regional industry leader for data connectivity and innovative digital products.

In the meantime, apparently acting on reports about the possible sale of Columbus, local cable operators, Amalgamated Cable System (JACS), TLM Communications and Verge Limited last week sought and was granted an Order by the Supreme Court, barring Columbus Communications and its affiliate, Columbus Acquisitions Inc, from disposing of any of its assets.

The 14-day injunction was granted last Friday.

Flow acquired the assets of several small cable operators as it seeks to consolidate and corner a larger share of the Jamaican market.

The applicants for the Order contend that a dispute over outstanding payment of some US$6.5 million to them has not been settled despite Flow's word that it has fulfilled its obligations under the deals.

According the the companies, FLOW has not provided accurate revenue figures earned from the cable, Internet and telephone assets it acquired from them in 2007.


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