Guyana is considering its options to force a Chinese company to pay the US$5 million outstanding from the sale of government’s shares in the Guyana Telephone and Telegraph Company (GTT) for US$30 million, according to a senior government official.
The Head of the National Industrial and Commercial Investments Limited (NICIL), Winston Brassington said two options were being considered to force Datang Telecom Technology & Industry Group to pay up the remaining sum. “We have two options-a legal option or a diplomatic option,” he said.
Brassington declined to go into details about the steps that would be taken because they are subject to proceedings.
He said Datang has so far only received a dividend of US$1 million over the past three years or about one percent annually.
The NICIL boss defended the sale of the Guyana government’s 20 percent stake in GTT, saying that the share-offer was advertised more than 40 times locally and close to 30 times overseas and government had written all the embassies and consulates. In the end, he said the highest offer received was US$7 million. “We did consider the shares to be worth a lot more,” he said. “The best terms we could get was US$25 million upfront and US$5 million later. We had other options which had less money upfront and more money later and so the Board and the Cabinet accepted this. It was a good price, we believe,” he said.
In the end, he said Guyana’ s Ambassador to China, David Dabydeen was instrumental in finding Datang Telecom Technology & Industry Group to buy the shares for US$30 million. Government announced the sale in April, 2013. Brassington further explained that the initial offer by that Chinese company was low but more than U$$7 million until it was increased over time. “We sold at a great time at a great price. Very little in dividends have been paid since we sold, we got a good price and the sector is facing liberalization,” said the NICIL boss.
He said about US$15 to US$20 million of the monies from the sale of the GTT shares was invested in the construction of the Marriott Hotel.
Brassington said the Guyana government opted to exit the telecommunications market because of forecast competition due to liberalization. He recalled that in the first 10 years of GTT, which was established in 1990, the company paid no dividends and then it started to trickle down.
He said although the Guyana government had a seat on the board, it had no control with its 20 percent stake. He further reasoned that governments typically do not need to have a stake in the telecoms sector because their role is to create the regulatory environment.
Brassington said while government had held its 20 percent shares, it did not put a director on GTT’s board due to the perceived conflict of government as a regulator and investor.