Wed | Jun 19, 2019

Cable & Wireless to exit stock market after nearly 30 years

Published:Sunday | April 8, 2018 | 12:00 AMSteven Jackson
Flow Jamaica managing director Stephen Price.

Cable & Wireless Jamaica, a local telecoms with a checkered reputation from its past days as a powerful telephone monopoly, would have celebrated 30 years as a listed company this year.

Instead, the current owner of the company that has gone through various names changes, rebrandings, and takeovers over time, has formally told the Jamaica Stock Exchange that it will delist the CWJ stock this week.

Cable & Wireless, which now trades as Flow Jamaica, is currently American owned. Its ultimate parent, Liberty Global, made a bid for all shares in the local telecoms through CWC Cala Holding, and while it only got just about half of the three billion shares held by more than 24,000 investors, it was sufficient for it to take the company private, assuming that the JSE approves the delisting.

Through CWC Cala and affiliated company Kelfenora Limited, Liberty's stake in Flow Jamaica increased to nearly 92 per cent, up from their combined 82 per cent holdings prior to the bid. The holdouts to the offer are unclear, but one of them is said to be Eric Jason Abrahams, who reportedly owns over 60 million CWJ shares and has a court case pending in which he is seeking permission to sue the current owners of the telecoms over the losses it sustained for several years. The case comes up in the Supreme Court on April 19.

Liberty acquired Cable & Wireless Jamaica indirectly in 2016 when it bought 100 per cent of UK-based Cable and Wireless Communications Plc. That deal followed CWC's acquisition of the original Flow operations regionally from Columbus International.

Cable & Wireless Jamaica itself has a history dating back to the 1880s and was also once owned by the Jamaican state.

Under private ownership, Cable & Wireless listed on the JSE in October 1988, according to JSE Yearbook information, and plans to delist on April 11.

The Companies Act allows a company with more than 90 per cent holdings to trigger a squeeze-out clause that allows for the mandatory acquisition of shares not tendered under a takeover bid. But CWC is not saying whether it plans to force the holdout shareholders to sell.

"CWC Cala Holdings Limited will reserve its comments at this time," stated CWC Cala in response to Financial Gleaner queries on the squeeze-out clause.

CWC Cala, through which the bid was made, itself holds 87 per cent of CWJ. It's unclear whether that could deny the company the squeeze-out trigger, but if it does, CWC Cala has the option of acquiring the shares held by Kelfenora, its affiliate, whose 4.8 per cent holding would put it above the threshold.

The issue will not affect the stock's delisting.

CWC Cala offered $1.45 per unit for three billion CWJ shares last December. The offer was accepted by 3,145 of 24,230 CWJ shareholders, totalling 1.63 billion units. As a result of the transaction, CWC Cala now holds 86.8 per cent of CWJ ordinary shares, or 13.5 billion units, while Kelfenora holds 4.87 per cent, or 818 million units, for total ownership of 91.7 per cent.

steven.jackson@gleanerjm.com