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Published On: Tue, Aug 11th, 2020

TelEm-BTP settlement leaves many questions unanswered

 

Telem CEO Kendall Dupersoy, Minister of TEATT Ludmila de Weever, Cabinet of TEATT Legal Advisor Aarti Baran, BTP Director Anthony Carty

PHILIPSBURG – Telecommunication Minister Ludmila De Weever brokered a settlement between telecom provider Telem and Bureau Telecommunication and Post (BTP), according to a press release issued by the ministry. Unfortunately, the press release was short on details so it remains unclear what this settlement exactly entails.

Apparently, TelEm owed money to BTP and BTP owed money to the government. Minister De Weever settled the dispute in an amicable manner and now she is free to issue a concession agreement to TelEm, based on a positive advice from BTP.

TelEm Chief Executive Officer Kendall Dupersoy said in an interview with StMaartenNews.com published in July that the company had not paid dividends to the government since 2016 because of the loans it had taken to finance its fiber-to-the-home project.

The minister’s press release states that “the realization of the fiber network will be a major step for the country’s telecommunication sector and its economic recovery and future growth.”

BTP-director Anthony Carty is quoted in the press release, saying that “TelEm Group now has the space to concentrate on providing key services to St. Maarten in these crucial times.”

The press release furthermore states that the existing bond and a $44 million loan (provided by the Windward Islands Bank) were “at risk with potentially dire consequences for the future of TelEm and its employees.”

The statement then notes that “the much-needed financing provided by Windward Islands Bank will now enable TelEm to realize the fiber-to-the-home network.” That does not square with Dupersoy’s statement that the company stopped paying dividends since 2016 because of the loan it took to finance the fiber-to-the-home project.

When asked about this, Dupersoy clarified to StMaartenNews.com that TelEm had a loan for the Fiber-to-the-Home (FTTH) project since 2015, but that TelEm had gotten a loan on better terms and used the new loan to cover other expenses. As a result of this, Dupersoy further stated that “we simply don’t pay dividends – the terms of all loan agreements limit how much dividends a company pays to the shareholder.”

According to Dupersoy TelEm was not paying BTP, however, “our responsibility to government was always met.” Payments to BTP were always made up to 2016, even though the concession expired in 2012. Since 2016, TelEm did not pay BTP because “we didn’t get our concession,” Dupersoy concluded.

The bottom line now seems to be that the settlement enables TelEm to continue its activities based on a concession agreement with the government.

But the settlement does not touch on the core issues that are playing at BTP – and that is remarkable. Financial supervisor Cft received for the last time an annual financial report from BTP for the year 2016. The reports for 2017, 2018 and 2019 are still missing.

Another point is the concession fees BTP has to pay to the government. The minister’s press release does not clarify how much BTP still owes to the government in unpaid concession fees. It is also unclear whether BTP has settled this. In 2018 BTP paid nothing, in 2019 the fees were budgeted as 1,858 million and for 2020 it is listed for 1.9 million in the budget. But further down in the budget, in the overview of concessions, it seems that BTP gets a huge discount: the government expects to collect just 1 million in 2020.

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Related articles:
Press Release: Minister of TEATT helps Telem settle long-standing dispute with BTP
Exclusive interview with TelEm CEO Kendall Dupersoy
Opinion piece: The mess at BTP is still there




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