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Jun 28, 2004

More layoffs as Intelco teeters on the edge

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Caught between the rock of overwhelming debt and the hard place of almost non-existent cash flow, the telecommunications company known as INTELCO appeared to take one step closer to the brink of disaster today as it closed three district offices in Orange Walk, Belmopan, and at the airport, and let go an undetermined number of employees at its Belize City headquarters. Reason for the closures: “restructuring”. INTELCO officials, who in better times called regular press conferences at which their aggressive executives heaped scorn on their well entrenched competition, were nowhere to be found today and have in fact been unreachable for several weeks. The problems facing the company are numerous and serious. They include the lack of income, as an interconnection agreement with B.T.L. scheduled for implementation on June first has become bogged down in what have been termed “administrative and technical details.” Having missed several years worth of operating deadlines the company has been living on borrowed money with debts piling up to heights so large that they are said to total far more than the operation is worth. INTELCO has been up for sale almost from the day of its creation, its main asset a fifteen-year exclusive contract to provide the Belize government with telecom services. Having spurned an early buyout offer from B.T.L.’s Michael Ashcroft, the company borrowed tens of millions to actually build a modern wireless network. INTELCO now finds itself in a position where it is unable to find a buyer willing to pay enough for the present owners to cover their debts and investments. The most likely purchaser, again B.T.L., is in no rush to step in with an offer as the longer it waits the lower the price should become. The one risk to B.T.L., however, is that if it waits too long, a foreign bargain hunter may step in and actually provide the real competition that B.T.L. has always feared. It’s a high stakes game of brinksmanship with government caught in the middle. Its unabashed cronyism was responsible for INTELCO’s creation by former P.U.P. minister Glenn Godfrey, and its subsequent love affair with B.T.L.’s new owner, Jeffrey Prosser, has left INTELCO all alone on the dance floor. As for what will happen next, it would appear that someone is going to have to lose some big money. Best guess is that means INTELCO shareholders, subsidized heavily by taxpayers.

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