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Digicel eyes Government’s 40% stake in Telecom Cook Islands

Thursday February 13, 2014 Written by Published in Technology
Telecom celebrated its 22nd birthday last July. 13070301 Telecom celebrated its 22nd birthday last July. 13070301

Telecommunications Minister Mark Brown said Digicel has indicated they are interested in purchasing the government’s minority stake in Telecom Cook Islands (TCI).

The development comes after reports that the company is on the verge of making a deal to acquire Telecom New Zealand’s (TNZ) 60 per cent stake in TCI.

The Cook Islands government currently holds the remaining 40 per cent share in the company.

Brown, along with Secretary Richard Neves, said the Government had yet to receive an offer and no decision has been made as to whether the Government would proceed in selling its TCI shares.

“We will deal with that when it comes up,” said Brown.

Neves said the Government would have to analyse a number of factors before any decision is made to sell its portion of Telecom, including forecasting future cash flows from the company.

With its minority 40 per cent stake, the Government currently retains two board members on TCI’s five-person board.

To maintain its presence, Neves said the Government would have to hold on to at least 20 per cent ownership in the company.

A Digicel representative was in the Cook Islands last week to look at the current regulatory environment, along with fees, taxes, and levies that would apply if the company commenced operations here.

Brown reiterated his previous public statement yesterday, saying the Government has no intention to become the owner of a telecom company and would waive its right of first refusal on the potential Digicel-TNZ deal.

His stance on the issue has drawn wide criticism from a number of circles, with opposition leader Wilkie Rasmussen labelling it as “reckless regard as to the interests of (the) Cook Islands”.

Rasmussen said the Democratic Party should jump ahead of Digicel and purchase TNZ’s stake, offload the shares to local buyers, then proceed to break up TCI into smaller business units.

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