The Government has sold its 20% shares in the Guyana Telephone & Telegraph company to a Chinese company for US$30M ($6B), Cabinet Secretary Dr Roger Luncheon announced yesterday.
Dr Luncheon, who said that the decision to sell was taken at Wednesday’s Cabinet meeting, said the company conducted its due diligence and decided to purchase the shares. The Government will receive US$25M up front and the remaining US$5M will be paid over the next five years. Dr Luncheon was unable to provide the name of the company.
Asked what motivated the sale, Dr Luncheon said that US$30M is a lot of money even though the government was receiving a little over US$2M a year from the telephone company, The government had retained 20% when it sold 80% to GT&T’s parent company, ATN in 1991.
The sale to the Chinese company will have the greatest impact on ATN/GT&T as the 20% shareholder may come with particular demands.
Government and GT&T/ATN have had tense relations over the period and a key outstanding issue is the question of the monopoly that GT&T has over the international gateway.
In September last year, Stabroek Business had reported that the Chinese telecommunications company Datang Telecom Technology & Industry Group could be favoured by government to acquire its 20 per cent shareholding in GT&T.
Datang is one of China’s showpiece hi-tech companies which specializes in the development, production and sale of electronic information systems and equipment. Founded in 1999, the company is reportedly managed by the state-run Assets Supervision and Administration Commission of the State Council.
The Datang Group offers reportedly included a proposed initial payment of US$20 million followed by a further payment of US$10 million over ten years. A second offer reportedly involved a down payment of US$25 million and a further US$5 million to be paid in installments over seven years.
Rumours of a mystery Chinese buyer for the shares from which the Government of Guyana has reaped significant returns since 1999 had been rife since earlier last year. But both NICIL, the state-run entity responsible for divesting state assets, and GT&T management had declined to make a public comment on whether or not a sale might be imminent.
Figures seen by this newspaper indicate that since 2000 when the Government of Guyana began receiving dividend payments on its shares to the end of last year, GT&T has paid over more than $6 billion in dividends. Since 1999 too, the Government of Guyana has also received more than $35 billion in consumption, corporation and value-added taxes. Sector analysts have said that these payments make GT&T one of the more profitable investments ever undertaken by the Government of Guyana.
Stabroek Business had also been informed that some time ago ATN turned down an offer to buy government’s shareholding in the company for US$45 million.
