Belize Business News

As the monopoly operator in Belize having some 155 000 subscribers, Belize Telecommunications Limited (BTL) is important for the country’s economy, and therefore the most essential news connected with it have been previously described – on September 19, 2006, BTL and Lucent Technologies announced an agreement for Lucent to deploy a real-time rating and charging solution for BTL voice and data services, and on March 15, 2007, BTL announced its plans to launch its SMS to Email service – the 1st of its kind in the country.

The ending of the Government’s brokerage of the sale of BTK was scheduled 2 years ago. However, the costs turned into the complex strings of transactions, which still are shrouded in court battles and continue to grow.

In the report in March 2005, when a tally of the numbers was last made, the focus was made on the costs incurred by the Government and the benefits accrued to Michael Ashcroft who now ultimately controls BTL. That report puts the tally at $23.3 million. However, only after that the court wrangling came to an end and the Government sold a large chunk of shares to Sunshine Holdings, an Ashcroft-related company.

As to the most recent figures, the tally was $77 million, which includes the following:
– $5.4-million-worth shares credited to Jeffrey Prosser’s Innovative Communication Corporation by the Government;
– the $10 million “premium” Michael Ashcroft got by means of selling off his majority interest to the Government in 2004;
– $4 million in costs Government incurred by re-profiling the debt with the $50 million loan from the International Bank of Miami taken to facilitate the sale of the BTL shares;
– interest costs of about $1 million for the above-mentioned loan;
– $6.6 million for re-profiling other debt related to the sale.

The Government of Belize also has to repay to BTL $6 millionwith tax credits, as the intended merger between BTL and the defunct Intelco failed, and $20 million in public funds loaned to Sunshine so that it buys the BTL shares back from the Government, and a $17 million write-off for the Belize Bank related to the same share transfers.

All the above-mentioned sums lead to approximatelt $77 million as of 2007.

A press release issued by Belize Natural Energy (BNE) confirmed that it had offered to buy back Government’s 10% oil equity. By BNE information, the offer was initiated by the Government of Belize, while the Government reports that the offer was prompted by BNE.

The full terms of the Belizean Government/BNE arrangement are not worked out, and one of the main undecided questions is of just what Government has 10% equity in – all fields explored by BNE, or only Spanish Lookout.

The Government sources stated that the Government is holding 10% stake only in the commercially producing Spanish Lookout oil fields, and is not liable for BNE’s explorations elsewhere; however, in its press release BNE did not mention the Spanish Lookout field, but said that the 10% equity that belongs to the Government of Belize, covers almost 600,000 acres.

The Government points to the Production Sharing Agreement with BNE in 2003. Government officials have explained that because Government has 10% equity in the Spanish Lookout field only, it should pay for 10% of the costs and share in 10% of the revenues that are associated with this field. If BNE is arguing that Goverment’s equity covers also non-producing fields, the end result would be less overall returns of the Government.

It was also recently reported that the Goverment investment’s cost was somewhere about $3 million, while BNE offered to get back that 10% for $33 million. That figure was proposed by BNE, using projections of revenues Government would have received over a 10 to 15 year projection. Government has some doubts about the accuracy of these figures, and is going to audit them.