GOVERNMENT OF GRENADA Grenada Co operative Bank Ltd

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                 (TRANCHE I)

                 MARCH 25, 2008
                              GOVERNMENT OF GRENADA

                                   OFFERING MEMORANDUM

                                     TABLE OF CONTENTS


Offering ..................................................................................................... 1

General Conditions of Sale ....................................................................... 2

Company History ...................................................................................... 4

General Information on Cable & Wireless - Global…………………….5

The Telecommunications Industry ............................................................ 6

Financial Analysis ..................................................................................... 7

Future Prospects ........................................................................................ 9

Financial Summary.................................................................................. 10

Share Application Form .......................................................................... 11

Banking Details ....................................................................................... 13

                    Government of Grenada – Offering Memorandum

The Government of Grenada is selling two thirds of its shareholding in Cable & Wireless
Grenada Limited. The shares will be sold to the Grenadian public in accordance with Clause 9(e)
of the Shareholder Agreement between the Government of Grenada and Cable & Wireless (West
Indies) Ltd. A total of eight million (8,000,000) shares, representing 20% of the total issued
shares of the company, is involved in the sale. Grenadians both locally and abroad are entitled to
participate in the divestment programme. The shares will be sold in two tranches of 4,000,000
each. The first tranche is immediately available and offers are currently being accepted. The
date of opening of the second tranche will be announced in due course.

The following are deemed to be some of the advantages of investing in the shares of Cable and
Wireless Grenada Limited.
   Own a stake in the leading company in the strategic and growing telecommunications
   Be part of an international group of companies.
   Pursue reasonable prospects of a higher stream of earnings than interest paid on savings and
    time deposits.
   Participate in the growth and development of the capital market and the emerging investor
    culture in Grenada.
   Hedge capital against inflation as the share value is expected to rise with time, based on
    historical performance.

The Government of Grenada wishes to stress however, that the above is a matter of opinion
provided for general information purposes only and is not intended as investment advice. The
information and analysis contained in this document have been derived from sources believed to
be credible and utilizing methodology believed to be reliable. This investment is an equity
investment, which by its nature does not guarantee the investment itself nor future cash flows in
the form of income or capital gains. Where operating results and dividend distribution are
mentioned, investors should remember that past performance, though indicative of, is not a
guarantee of future performance. Furthermore, equity share value can fall or rise. Investors are
accordingly urged to consult an independent financial advisor before making a decision on this

                   Government of Grenada – Offering Memorandum


No. of shares offered in this tranche                   4,000,000

Offer price per share                                   EC $12.50

Terms                                                   Full payment on application

Minimum purchase size                                   50 shares

Increments                                              10 shares

Period of Offer                                         6 weeks

Eligibility                                             “The Grenadian Public”

(1) The Government of Grenada, recognizing the recent general increases in prices due to
   the fall in value of the US Dollar, increases in oil prices and the general financial
   difficulties being experienced in the international community, has decided to make
   this special introductory offer price of $12.50 per share. This special price is intended
   to ensure that as many Grenadians as possible have the opportunity to participate in
   this divestment programme.

(2) The Government of Grenada is contractually obligated to provide preferential
   arrangement for the Grenadian staff of Cable & Wireless Grenada Limited.
   Additionally, due to social considerations, the Grenada Government is committed to
   offering preferential treatment to small Grenadian investors, defined as those applying
   for not more than 200 shares each. Accordingly, one million (1,000,000) shares have
   been reserved for the aforementioned group of investors, at the offer price of $12.50
   per share.

(3) No maximum purchase size has been set, but if the offer is over-subscribed, the
   excess will be allotted out of the second tranche at a price to be determined before the
   tranche is put on sale. If the second tranche is insufficient to satisfy the excess
   demand, then the shares will be allotted on a proportionate basis and refunds of

                  Government of Grenada – Offering Memorandum

   application monies made to the over-subscribers, on a pro rata basis. Any investor
   who has over-subscribed in the first tranche and does not wish to participate in the
   second tranche will be refunded the over-subscribed amount upon written request
   submitted to the Permanent Secretary, Ministry of Finance.

(4) “The Grenadian Public” is defined as

  i. A citizen of Grenada; or

 ii. Any incorporated or other body incoporated, formed or organised in Grenada, the
    majority of the shares or other ownership of which are beneficially held by persons
    who are citizens of Grenada; or

iii. Any incorporated or other body wherever incorporated, formed or organised, that is
    wholly owned by citizens of Grenada; or

iv. Any incorporated or other statutory body that is wholly owned by the Government
    of Grenada or any agent thereof; or

 v. A trust established by a citizen of Grenada for the administration of funds for the
    benefit of persons who are citizens of Grenada; or

vi. Any incorporated or unincorporated body that is wholly owned and controlled by a
    trust as defined in sub-clause (v) above.

     The reference in this sub-clause to any beneficial interest or to anything beneficially
     owned or held includes ownership through a trust, legal representative, agent or

                  Government of Grenada – Offering Memorandum


Cable and Wireless Grenada Ltd is a private limited liability company which was
incorporated on the 5th October, 1988 under the laws of Grenada. The Company
commenced operations on the 12th January 1989, its principal activity being the provision
of telecommunication services to the tri-island State of Grenada, Carriacou and Petite
Martinique. The company is a subsidiary of Cable and Wireless (West Indies) Limited
which itself is an indirect subsidiary of Cable and Wireless Plc, a public company
incorporated in London. The shareholders of Cable and Wireless Grenada Limited at the
present time are Cable and Wireless (West Indies) Limited, which owns 28 million shares
or 70 percent of the company and the Government of Grenada which owns 12 million
shares or 30 percent of the company. The total issued shares amounts to 40 million.

In April 2001 an agreement was signed between the Company and the OECS contracting
states in respect of liberalising the telecommunications industry. However, this was not
consummated until late 2003 when the new policy and regulatory changes began to have
a practical impact with the entrance of two competitive players in the mobile market.
Digicel launched its service in October, 2003 and AT&T launched in March 2004.
Another prospective entrant Global Network Providers has not yet commenced
operations. Sometime in 2005 AT&T sold out its operations to Digicel. So at the present
time there are only two players in the mobile market in Grenada.

                  Government of Grenada – Offering Memorandum


Cable and Wireless Plc is one of the world’s leading international communications
companies with total revenues of £3.3 billion (EC$17.5B). Cable and Wireless Plc is
listed on the London Stock Exchange with a market capitalisation of approximately
US$7.5 billion (EC$20 billion). Cable and Wireless Plc operates through two (2) stand
alone business units: Europe, Asia & US and International.

The Europe, Asia & US business provides enterprise and carrier solutions to the largest
users of telecoms services across the UK, US, continental Europe and Asia, and
wholesale broadband services in the UK.

The International business operates integrated telecommunications companies in thirty-
three (33) countries offering mobile, broadband, domestic and international fixed line
services to both residential and business clients.       C&W Grenada is part of the
International business unit, and Cable and Wireless Plc provides support through its
subsidiaries to C&W Grenada.

At 30 September 2007, the International business unit registered 5.7 million mobile
customers across twenty-six (26) markets, an increase of 34% over the prior period.
Broadband customers increased by 30% to 439,000, making Cable & Wireless
International the retail market leader in all twenty-six (26) markets where it provides
broadband services.

The major objective of Cable & Wireless International is to become the leading
telecommunication service business in all of its markets by:
 Offering customers attractive products and services using high quality networks
   coupled with a superior customer experience;
 Continuing to provide customers with the highest level of quality service; and
 Managing asset quality in keeping with international standards.

                  Government of Grenada – Offering Memorandum


2.1 Regional Market
According to the Eastern Caribbean Telecommunications Authority’s 2006 Report, the
telecommunications sector in the ECTEL member states remains active with
telecommunications accounting for an average contribution of 11% to GDP. The report
goes on further to say that the mobile telephony market continues to dominate the
telecommunications sector with revenues continuing to trend upwards. For the year to
March 2006, total revenues stood at EC$712 million across the member states, largely as
a result of increased mobile and Internet subscription. Technology continues to drive
innovation in this sector as new ways of providing telecommunications services to
consumers are introduced.

2.2 The Grenada Market
In Grenada, the telecommunications sector remains buoyant, contributing an estimated
13.2% to GDP in 2005. For the year to March 2006, total revenues increased to
EC$156.6 million, a 10.3% increase over 2005. The largest contributor to revenues is
fixed line services, which accounts for approximately 48% of total revenue. Mobile
services contributes approximately 44% to revenue with internet services contributing
approximately 5%. Direct employment in the sector increased by 13.1% in 2006, while
total investment increased by 14.2% to 29.6 million dollars. There are two main players
in the telecommunications sector in the Grenada market - the incumbent Cable and
Wireless Grenada, which is the sole provider of fixed line and internet services, and
Digicel Grenada Limited which operates solely in the mobile telephony market.

2.3 Market Share – Cable & Wireless Grenada
Historically, Cable and Wireless Grenada Ltd. has been the dominant player in the
industry in Grenada. This trend is continuing at the present time.

                  Government of Grenada – Offering Memorandum

Attached is a financial summary of the company which shows the gross revenue, profit
after tax, dividends paid, profit or loss per share, dividends per share, shareholders’
equity and number of issued and outstanding shares. The Company’s fiscal year ends on
March 31. The time period covered by this analysis is from 1999 to 2007, both years
inclusive. This period is further broken down into three separate and distinct phases. The
first period is from 1999 to 2002, being the last four years of monopoly. The second time-
period is the three years (2003 to 2005) after liberalisation of the industry. In addition,
this period was affected by hurricane Ivan. The third time-period covers the years 2006
and 2007. The fiscal year 2006 was also affected by another hurricane, Emily, which
although striking in July 2005 was actually within the fiscal year ending in March 2006.

The attached financial summary shows that in the first time-period (1999 to 2002) the
company achieved an annual average of 27.4 million dollars of profits after tax. During
this period it also paid out annual average dividends of 19.7 million dollars. The profit
per share averaged 69 cents per annum. The dividends per share averaged 49 cents. The
average shareholders= equity during this period was 115.4 million dollars.

The second time-period from 2003 to 2005 was affected by adjustments for impairment
of assets due to the liberalisation of the industry. In addition, hurricane Ivan also
contributed to further impairment of the assets of the company. As a result of these
exceptional and non recurring items, the company suffered losses during the period
averaging 6.1 million dollars per year. However, during this same period, the company
paid out 56.9 million dollars in dividends or an average of 19 million dollars per annum.
The loss per share over the three years was fifteen cents per annum. The dividends paid
averaged 47 cents per share per annum. Again due to the losses suffered by the
impairment, the shareholders= equity averaged 79.2 million dollars over this period, as
compared to 115.4 million dollars for the first period of four years 1999 to 2002.

                  Government of Grenada – Offering Memorandum

When valuing businesses as going concerns, experts normally would adjust the operating
profits to eliminate exceptional and non recurring items. If this were done in respect of
Cable and Wireless Grenada Ltd., the approximate earnings after tax would have
averaged 17.7 million dollars per annum. As mentioned before, dividends of 19 million
dollars per annum were paid, slightly exceeding the normalised earnings and slightly
below the level of $19.7 million paid during the first time-period.

The third time-period was the years 2006 and 2007. During this time the company
realized average earnings after tax of 12.2 million dollars per annum. The profit after tax
per share averaged 31 cents per annum. No dividends were paid during this two year
period, mainly due to the consequential effects of two hurricanes and impairment of
assets resulting therefrom.       Other public companies were similarly affected.
Shareholders= equity went down further to an average of 62.5 million dollars over the
period. However, this last period seems to have heralded a return to normalcy by the
company.     According to the Chairman of Cable and Wireless Grenada Ltd., in
commenting on the 2007 performance, Athe recovery from the devastation from
hurricanes Ivan and Emily is truly nearing completion. This was evidenced by the
auspicious operating results for the financial year ending 31st March, 2007. Gross
revenue for the financial year in review of 112.2 million dollars grew 1.6 percent
compared to last year. The company also achieved improved profitability on the previous
year, as net profit for the year of 13.2 million dollars bettered the previous year’s figure
by 17.4 percent. With the return to profitability for two straight financial years, the
company is now in a position to distribute part of the realized profit to the shareholders.
The Board of Directors will consider a dividend payout during the financial year ending
31st March, 2008."

                  Government of Grenada – Offering Memorandum

As mentioned previously, the Chairman of the company expressed satisfaction with the
recovery of the company since the devastation caused by the last two hurricanes which
hit the island. This satisfaction is reflected in the Company’s investment in plant and
equipment. In his 2007 report, the Chairman of the company commented that “efforts
continued during the year in review to restore the company’s network capacity to pre
Ivan level as well as to effectively compete in the mobile sector and to enable the
introduction of new innovative products in the emerging high speed internet market.” In
the financial year ended March 31, 2007 the company invested in the improvement and
expansion of its network infrastructure, the upgrading and expanding of its mobile
network and in increasing the robustness of the fixed network infrastructure. The largest
single capital expenditure went towards the broad band infrastructure. The Chairman
commented that “With broad band market at its burgeoning stage, there is an urgent
requirement to provide the necessary infrastructure to support customer growth in this

With regard to earnings, the records show that since 2006 the company has been
returning better than expected results. For the half year to September 2007 the results of
operations exceeded the company’s plan in gross revenue, gross margin, operating profit
and profit after tax. Earnings after tax for the six months was 11.3 million dollars, which
included some exceptional items totalling almost $5 million.

As the investment in tourism-related products increases it is expected that revenues in the
telecommunications industry as a whole will also improve by virtue of the large increase
expected in visitor arrivals. Revenues from this new source should offset any declines
that may occur elsewhere in the industry.

              Government of Grenada – Offering Memorandum


                             FINANCIAL SUMMARY

Fiscal             Profit /                  Profit /                 Share-     No. of
Year     Gross     (Loss)      Dividends     (Loss)      Dividends    Holders'   Issued
March 31 Revenue   After Tax   Paid          Per Share   Per Share    Equity     Shares
        $'000      $'000       $'000                                  $'000      000
1999    $146,646   27,292      18,012        68.2c       45.0c        108,229

2000    146,450    25,596      16,893        63.9c       42.2c        116,932

2001    127,634    29,222      19,640        74.4c       49.1c        116,601

2002    127,554    27,421      24,157        68.1c       60.4c        119,865

Total   $548,284   109,531     78,702        2.75        1.97         461,627

Average $137,071   27,383      19,676        0.69        0.49         115,407      40,000

2003    $114,441   15,759      22,098        39.4c       55.3c        113,526

2004    120,865    (10,470)    23,705        (26.2)c     59.3c        79,351

2005    108,053    (23,637)    11,055        (59.1)c     27.6c        44,659

Total   $343,359   (18,348)    56,858        (0.46)      1.42         237,536

Average $114,453   (6,116)     18,953        (0.15)      0.47         79,179       40,000

2006    $110,447   11,242          -         28.1c           -        55,901

2007    112,225    13,203                  - 33c                     - 69,104

Total   $222,672   24,445      0             0.61        0            125,005

Average $111,336   12,223      0             0.31        0            62,503       40,000

Overall $120,953   11,163      12,876        0.28        0.32         85,696       40,000

                  Government of Grenada – Offering Memorandum

                                  BANKING DETAILS

                                                                Co-op Bank
Grenada Co-operative Bank Limited has been appointed as the official banker to the
Government of Grenada regarding all banking aspects of the sale of Government’s
shares in Cable and Wireless Grenada Limited to the Grenadian public. The address of
the Corporate headquarters of Grenada Co-operative Bank Limited is:
      P.O. Box 135
      No. 8 Church Street
      St. George’s

Attached is a list of the Grenada branches of the Bank.

Online and / or Overseas Payments

Grenadians who wish to apply for the Cable & Wireless shares online can visit the
Government of Grenada’s website at or the Grenada Co-operative Bank’s
website at for application forms and other information.
Also Grenadians residing abroad can wire funds through their bank, by providing the
following information:

 Correspondent Bank: Citibank
 Swift Address: CITIUS33
 ABA#: 021000089
 Grenada Co-operative Bank Ltd., Church Street, St. George’s, Grenada W.I
    Swift Address: GROAGDGD
 Beneficiary Account Name: Government of Grenada – Cable & Wireless Sale of
   Shares – Overseas
 Beneficiary Number: 113000135

                  Government of Grenada – Offering Memorandum

                         BANKING DETAILS (continued)

                                                                    Co-op Bank
 Correspondent Bank: Bank of America
 Swift Address: BOFAUS3M
 ABA#: 026009593
 Grenada Co-operative Bank Ltd., Church Street, St. George’s, Grenada W.I
    Swift Address: GROAGDGD
 Beneficiary Account Name: Government of Grenada – Cable & Wireless Sale of
   Shares – Overseas
 Beneficiary Number: 113000135

 Correspondent Bank: St. Kitts-Nevis-Anguilla National Bank
 Swift Address: KNANKNSK
 Grenada Co-operative Bank Ltd., Church Street, St. George’s, Grenada W.I
    Swift Address: GROAGDGD
 Beneficiary Account Name: Government of Grenada – Cable & Wireless Sale of
   Shares – Overseas
 Beneficiary Number: 113000135

Note: All charges for Wire transfers must be paid upfront, so that full purchase price
reaches the account at Grenada Co-operative Bank.

For application forms, please visit or or any
of the following locations:
 The Government Treasury
 Government Revenue Offices
 All branches of the Grenada Co-operative Bank Ltd.

                 Government of Grenada – Offering Memorandum

                        BANKING DETAILS (continued)

                         LIST OF BRANCHES -                        Co-op Bank

                                   Head Office:
                                 No. 8 Church Street
                                    St. George’s

                                    Main Street

                                   Victoria Street
                                    St. Andrew

                                     Main Street
                                     St. Patrick

                                  Spiceland Mall:
                                    Grand Anse
                                    St. George

Opening Hours: Monday to Thursday 8 a.m. to 2 p.m., Friday 8 a.m. to 4 p.m.


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