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Feb 16, 2005

Legal issues cloud GOB disposal of BTL shares

Story PictureThere was news on land and sea today, with the groundbreaking for a new U.S. Embassy in Belmopan along with that country’s donation of a new boat for Belize’s embryonic coast guard. But we’ll lead tonight’s broadcast with the latest developments involving electronic signals that pass through the air…that is telecommunications. In an interview this evening with News 5, Minister of Home Affairs and Investment, Ralph Fonseca–government’s long time point man on the issue–spoke for the first time on where the BTL deal is–or isn’t–going.

Stewart Krohn
?What is the strategy now with the BTL situation??

Ralph Fonseca, Minister of Home Affairs and Investment
?Well the first important issue will have to be, to make sure that we continue to protect the taxpayers’ dollars that are at risk with the shares of BTL and we have done that. We?ve secure the shares of BTL and we intend to hold on to it until we have a strategy which will accomplish the second goal that we have. And that is to have as many Belizeans involved with the shares of BTL as is possible.?

Stewart Krohn
?Does the government have the luxury of time or does whatever is going to happen will have to happen very quickly? Can Belize afford to finance that kind of note with an outside bank??

Ralph Fonseca
?Well first of all the luxury of time, as you said, is costly. But in this case, as you know, BTL does make a fairly decent profit. So as we are holding those shares, we are also making dividends from BTL, which should more than take care of any interest costs at International Bank of Miami. The actual re-profiling of that debt, which would be formalised on Monday in the National Assembly would allow us seven years if you?d like. But each year, as you know, it becomes more expensive. So we have some time to deal with it but the faster we move the shares unto Belizeans and have the company stabilised because I think there is a feeling of instability right now. Although we have tried to spend quite a bit of time with the staff and with other shareholders of BTL, the better.?

Stewart Krohn
?Is Jeffrey Prosser groups still in the picture or is that history??

Ralph Fonseca
?We have told them that their time has ran out.?

Stewart Krohn
?What about Michael Ashcroft??

Ralph Fonseca
As you know, he?s got an action against us at the L.C.I.A., the London Court of International Arbitration and as I understand it he?s also filed an injunction that he has gotten out of that court that says that the government cannot deal with the shares, which doesn?t mean that we can’t put the shares in our name; as we have. The lawyers will have to deal with that.?

Stewart Krohn
?So effectively now is our government barred from doing what we would like to do with our shares because of that action??

Ralph Fonseca
?Like I said, the lawyers will have to deal with that. I am really not sure as to what the legal position is but that?s the information that I got today.?

Stewart Krohn
?What is the position with Intelco now??

Ralph Fonseca
?Alright Intelco, as you know, the past board of BTL has taken on some nine point eight million U.S. or almost twenty million Belize of debt from Social Security in order to hold on to the properties that were mortgaged to Social Security on which Intelco had quite a bit of its equipment, towers and etc. And Belize Telecoms, which was the owner of the majority shares of BTL and still owns about twenty-six percent of BTL that it has totally paid up for, bought the note from RBTT–as we understand –which means that the Intelco note which covers the shares and covers the other assets; the chattels, if you?d like, of Intelco are being held by Belize Telecoms.?

Stewart Krohn
?Among those assets do those include the fifteen year license that Intelco was granted??

Ralph Fonseca
?I would think so.?

Stewart Krohn
?So that means Government of Belize still has a contract with Intelco for them to provide services to that government that the government will pay for??

Ralph Fonseca
?Well again that?s something that the lawyers would have to decide on because in effect Intelco went into receivership so I have been advised–I have been told that there could be two sides to that argument. But I don?t think they have gotten to the point to determine that yet. We are hoping that there be an overall amicable settlement with this thing.?

Stewart Krohn
?One last question; I know hindsight is always twenty/twenty. Looking back at the whole communications scene what would you have done differently??

Ralph Fonseca
?Well I think the ambition of having competition in telecommunications was a very expensive one and a very large ambition. I think we needed to know some more about some of the intricacies as it related to interconnection on the legal side, on the hardware side, and on the software side. Because as you know, that?s where we were held up in court and also on the technical side and apparently during that period of time Intelco just could not survive. So in hindsights…twenty/twenty but unless we had made the move we would not have been where we are today in telecommunications. Regardless of what has been said, there?s been a serious expansion of BTL. We still have competition because the Speednet people are hooking up although it?s not Intelco. The Intelco assets will come into play some how or the other. As I understand it there might even be used or some of it maybe used today. So the whole telecommunications industry has expanded significantly. It also modernised itself and it?s also a lot more competitive.?

Stewart Krohn
?No apologies in order??

Ralph Fonseca
?Well apologies…apologise to whom? It depends on what we are talking about. Should we have gotten involved with the commercial venture when we were a government? It was really a commercial venture that took place. Should the securitization not have been monitored better than it was? If you are talking about that kind of thing then yes, certainly, we needed a lot more regulation in that area as is being proven. But the intention of having competition in telecommunications, I think there were demonstrations calling for it.?


Viewers please note: This Internet newscast is a verbatim transcript of our evening television newscast. Where speakers use Kriol, we attempt to faithfully reproduce the quotes using a standard spelling system.

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