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Demos eye majority stake in TCI

Monday May 05, 2014 Written by Published in Technology
Democratic Party leader Wilkie Rasmussen. 14040215 Democratic Party leader Wilkie Rasmussen. 14040215

The Democratic Party will push to have Telecom Cook Islands owned by a majority of local shareholders if it comes into power, says leader Wilkie Rasmussen.

“It’s an asset that I think the people of the Cook Islands should hold on to,” he said. “We’ve sold off other public assets, and I think are poorer for it.”

Speaking on the Demo initiative, Murienua Member of Parliament James Beer – who acts as the party spokesperson on economic development, trade and energy – said the party is currently in the process of drafting a letter to global telecommunications firm Digicel to let the company know its intentions should they hold the balance of power after the July 9 vote.

Beer said the Demos would hold on to the Government’s 40 per cent stake in TCI, and exercise a clause in the 1997 joint venture agreement that saw the Cook Islands Government sell 60 per cent of the company to Telecom New Zealand.

Included in that agreement is a ‘buyback clause’, which Beer said allows the Government to consider re-purchasing 20 per cent of TCI upon every three-year anniversary of the initial sale.

If Beer and the Demo Party’s understanding of the agreement is correct, the Government would be in the position to regain a majority stake in TCI in 2015.

“What hasn’t been explored is our buyback right,” he said. “Our position is that we want to clearly indicate that we have an intention of securing that 20 per cent stake.

“It’s important that Digicel and Telecom New Zealand are aware of the Democratic Party’s intentions.”

Beer said he thinks Digicel likely wouldn’t be interested in having only a minority stake in TCI.

A letter is currently being drafted by the party for the Business Trade Investment Board and the Chief Executive of TNZ to show an expression of interest in exercising the buyback clause, said Beer.

Rasmussen said the party would support either an outright purchase by the Government or a 50-50 agreement with a “stable and solid” proposal by public shareholders – with the intention to eventually have all shares publically owned.

Digicel has recently made an official offer for Telecom New Zealand’s 60 per cent stake in TCI for $23 million, with May 10 set as the deadline for any local to match that offer. Rasmussen has written to officials to ask for an extension of that deadline.

Beer said it’s imperative the Government holds on to its current 40 per cent stake in TCI in order to keep the idea of becoming a majority shareholder afloat.

In Parliament last month, Finance Minister Mark Brown said the Government has no interest in selling its stake.

“We’ve made it clear that we are not entertaining selling those shares to Digicel, despite their interest in them,” he said.

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