Flow owners could sell company in three years
Published:Sunday | October 16, 2011 | 12:00 AM
Steven Jackson, Business Reporter
Owners of the Pan Caribbean fibre- optic cable and telecommunications firm Columbus Communications, which trades in Jamaica as Flow, will within three years decide whether to sell the regional company or raise additional capital to launch a new business plan, according to AIC Global Holdings Inc. executive director Robert Almeida.
"Columbus will likely be monetised, which means that by 2013 we are either going to upsize the debt," or by 2014 sell the business or launch an initial public offering, Almeida told a Victoria Mutual Wealth Management investors' forum Thursday night at the Terra Nova Hotel in St Andrew.
AIC Holdings, led by Canadian/Jamaican billionaire Michael Lee Chin, is a major investor in Columbus Communications, which has business in fixed-line telephone, Internet and cable television.
New AIC Barbados bonds
Almeida was pitching two new AIC Barbados bonds valued at US$10 million and J$1 billion, to local and overseas investors in order to refinance debt. Victoria Mutual Wealth Management is the arranger for the bonds.
Following his presentation, Almeida told Sunday Business that selling Columbus Communications was an option for consideration in order to pay out shareholders for investing some $260 million in the company.
The company spans 22 territories and has US$1.3 billion in assets, according to information on its website.
In 2009, shareholders received a dividend payout of US$0.50 on every dollar invested in the company. According to Almeida, the next dividend payout date in about three years would yield an equivalent sum of US$0.50 on the dollar.
Columbus Communications, incorporated in 2004, has a 10-year business cycle, Almeida to,d the investors' forum. The first five years involved investment in the rollout of infrastructure and services and the next five years were aimed at monetising the company.
By 2014, Columbus would have achieved its core business plan of building out into the Caribbean. "Shareholders will get their money back from Columbus in three years," he said.
Almeida also told Sunday Business that "by 2012 to 2014 we will develop the next business cycle and a number of strategies will be considered," he said. "Yes, it is an option that the company can be sold. It is one option," Almeida added in response to a question.
Option
One option under a new business plan would see the company extend its operations deeper into Latin America, but that would require new capitalisation, he explained.
In 2009, Lee Chin pledged his stake in Columbus Communications to appease creditors of a then-overdue and maturing AIC Barbados bond.
It was not clear whether any of his holdings in the cable company were eventually sold. However, in a subsequent interview, Lee Chin said he would not sell his interest in Flow, but added that he found some way to pacify the bondholders. In 2010, Columbus reportedly raised US$450 million on the bond market.
Going forward, Almeida said that the fund would invest in India, Colombia and the Caribbean. AIC Global Holdings assets include AIC, Columbus Communications, National Commercial Bank, Advantage General Insurance, real-estate outfit Las Olas, InterEnergy power company, Mundra Ports, A2Z Maintenance and Engineering, and coal company Adani Enterprises.