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Latin America Investment News on Viva Tropical

Panama to Sell State Shares in Enterprises

Article Summary:

Ricardo Martinelli’s administration is considering selling shares belonging to the Panamanian Government in joint ventures. This policy would affect companies such as Cable & Wireless Communications, where the state owns 49%, as well as Fortuna, Esti, and others.

Photo Credit: Prensa

Original Article Text From Prensa via Google Translate :

Government Shuffles Out Of Joint Ventures
The Government is planning the sale of its interests in certain joint ventures in Panama.

Yesterday morning, President Ricardo Martinelli and Minister of Economy and Finance (MEF), Frank De Lima, endorsed the sale of state actions.

“Since the beginning of this administration, the MEF has spoken to explore the possibility of monetizing the State’s participation in joint ventures”, and so he hired a company to make a valuation of the shares of state, said the minister.

The idea, he explained, “would offer the opportunity to buy Panamanian participation in several joint ventures, as Fortuna, Esti, Cable & Wireless, among others.”

While acknowledging that for now “we have nothing definite,” said the “democratization of capital would be good for the country.”

With a sale of the shares, the State would receive an income strong right now, but would not receive the annual dividend that the company generates.

Ownership Structure
In 1997, Intel completed the privatization of SA state telecommunications company, acquiring the British company Cable & Wireless Communications a 49%. The state was left with another 49%. The company paid $ 652 million to the State for their participation and also obtained the right to manage it. The contract provides that in case of a sale of shares by the State, Cable & Wireless Communications is a preferential right to allow it to increase its share by 5%, said Robert Mendoza, executive director Corpativos Affairs Cable & Wireless Panama.

Implementation of the sale, the company would “consider and evaluate expanding its stake,” he stated.

The union of the company owns the remaining 2% of shares. Denia Powell, secretary of the union and who participates in board meetings, said it has asked the question on the sale of the shares during the meetings but both company representatives and the government have denied.

The board is composed of five representatives of the company, three government and one of the workers.

Savings In The Operation And Competition
The former Minister of Economy Fernando Aramburu Porras said revenue from the sale should be “saving and not spending,” adding that he “would not sell the share of hydroelectric generators to be excellent investments continue appreciating and paying dividends” .

In the case of Cable & Wireless, said that the sale should be transparent and competitive “to all who are interested to buy shares on equal terms.”

He also recalled that “must fulfill the mandate of the law that states that if these or any other actions of the privatized companies were sold the proceeds must be deposited in the Trust Fund for Development or possibly replacement sovereign fund” .

Dividends and participation
$ 649 million are dividends paid to the State by Cable & Wireless since 1997.

49% of the shares of Cable & Wireless owned by the state. The British company has another 49% and the remaining 2% is held by union workers in the firm.

Link to Original Article:

From Prensa

Latin America Investment News on Viva Tropical