Today’s story on the purchase of United Telecommunication Services (UTS) is interesting. Liberty Latin America (LLA) paid US $189 (NAf. 339) million for Curaçao’s 87.5 per cent of the shares.
The intention is to also buy the 12.5 per cent of St. Maarten, for which the Parliament in Philipsburg would have to approve a national ordnance. If the same relative value applies, a quick calculation shows this should produce US $31.5 (NAf. 56.5) million.
That amount would no doubt be a welcome addition to the treasury in connection with the current budgetary issues, but there are other factors to consider. The most obvious one is any potential negative impact on UTS competitor TelEm, which is 100 per cent owned by the local government.
It was not immediately clear whether selling St. Maarten’s part too is somehow mandatory or has been agreed to in principle. If hanging onto such is still possible, that might be worth considering.
After all, it involves only a minority stake that would hardly be an obstacle to Liberty’s
commercial plans and operations. At the same time, this ought to give the country at least a little bit of influence within the company going forward, and likely future dividends, because the new owners are obviously in the business of making money.
Government partnering with the private sector in certain ventures that have widespread implications is nothing out of the ordinary and increasingly common. One could make the argument about “serving two Gods,” but that is then already the case by being both a TelEm and (partial) UTS owner, while the general interest is what must always prevail in public policies regardless.
Receiving a one-time payment of several tens of millions is an attractive immediate prospect, but far greater long-term benefits could be waiting just over the horizon. In short, there may be a lot more to this matter than at first glance meets the eye.
