By Floyd French
(Basseterre, St. Kitts) – Cable and Wireless announced that it will be offering over 1.6 million ordinary shares to citizens and residents of the Federation. The announcement was made on Feb. 12 at a media conference. The application process began the day after, Feb. 13 and will end on Mar. 28.
The total number of ordinary shares that will be sold to the public is 1,661,538, and which represents 5 percent of the company’s total share capital. These shares once formed part of the Government’s assets and its 17 percent stake in Cable and Wireless.
The Government sold its shares to Cable and Wireless in Sept. 2007 for approximately $36 million dollars. As part of the sale agreement, the Government negotiated that shares representing 5 percent of its former interest are made available to the St. Kitts-Nevis public. The remaining 12 percent of former Government interest is now part of the company’s total share capital.
“The challenge of people empowerment is still a very pressing one. But as our people have advanced over the years, it is no longer prudent for Government to own all the key assets,” Deputy Prime Minister Sam Condor said at the press conference.
The end of Government interest in Cable and Wireless can increase the total share ownership of the general public from 18 to 23 percent if the public offering is fully subscribed. Cable and Wireless’ interest, however, will increase from 65 to 77 percent or more if the shares offered are not fully subscribed. The Cable and Wireless shareholding after the Sept. 2007 purchase was 82 percent.
“Empowerment now entails transferring sovereignty to our people, allowing them direct ownership and control of those assets,” Mr. Condor said. He cautioned that ownership must be “widely distributed among our people and not controlled in the hands of a few.”
The Deputy Prime Minister outlined the application strategy to ensure the wide distribution of shares to citizens and residents. According to the Deputy Prime Minister, every applicant will have their first 100 shares allotted before a second allotment of 150 or a third allotment of 200 shares is assigned.
“The smallest order will be completed first while the largest order will be completed last,” he said.
Chief Executive Office of Cable and Wireless St’ Kitts-Nevis Limited, Ms Patricia Walters, said the major parts of the transfer agreement are on schedule. The agreement requires that the public share offering be made within 12 months and the company be listed on the East Caribbean Security Exchange in order to facilitate the sale to the public.
The shares are offered at a discount to the public. They were purchased at $6.40 each, but they will be sold for $5 each plus applicable broker’s fees. Last year’s dividend was $0.35 per share. A purchase of $5 each share, based on last year’s dividend, represents a 7 percent return on investment. The shares currently have a value of $6.40 and if sold after purchase represents a 28 percent return on investment.