Is Cable Bahamas Pulling a “CLICO 2.0” on its Minority Shareholders?
Cable Bahamas plans to invest over $80 million to buy a few scrappy cable operations in southern Florida.
Curiously, the people who sit on the Cable Bahamas board are the same people who have substantial ownership in the companies being purchased.Further, there os a penalty clause to be paid to Cable Bahamas if the deal does not go through.
Does this mean that Philip Keeping and Troy D’Arville make money whether the deal goes through or not?
Whose interests are the Chairman and Director protecting… theirs or the Bahamian public?
It would appear that there is a blatant conflict of interests and some minority shareholders are wondering how they will be protected in the event that this is another of Phil Keeping’s alleged “pump-and-dump schemes.
These investments on the surface may be perceived as pawns in a “Pump-and-Dump” business ploy. You simply pump some capital in a business and then dump it for more money on an unsuspecting buyer. Mr. Keeping, in 2004, sold his shares to Mr. Paddick, who then sold them back to Cable Bahamas in 2009… with a 30% above the market share price. Now Mr. Keeping and Mr. Pardy – cofounders of Cable Bahamas in 1994 along with Mr. D’arville – are selling to Cable Bahamas a company called Summit Broadband, allegedly a three year old company without a complete built-out network, in need of immediate capital infusion that the board of Cable Bahamas has not revealed how much that capital is?
Will the National Insurance Board’s 22% stake in Cable Bahamas become less valuable? Ultimately, if the share price depreciates or is diluted NIB may suffer financial losses.
Is Cable Bahamas doing a “CLICO 2.0” on its shareholders?
Clico used Bahamian investors to purchase a Florida asset “Wellington Preserve” and leveraged itself until it eventually became unsustainable and lead to its demise. The companies in Florida that Cable Bahamas wants to purchase are being acquired for $89 million, while Cable Bahamas is asking for a price increase of $8 on its basic cable service – without any added value to its consumers. That increase would generate an estimated $8.3 million per year.
“Tribune business understands that more information will be provided to shareholders once US and Bahamian regulatory approvals are received, and many institutions will likely be pitched to as part of its preference share issue.” How is it a public trading company that is 100% Bahamian owned will provide more information after they have acquired assets? Where is the transparency in these matters and where are the local regulators demanding such?
Perhaps answers to these questions and others should be addressed before the purchase of the Florida companies, not after.
Source: Bahamas Presscorruption, financial, incompetence, telecommunications