The True Value of B.T.L.

When the new budget was presented to the House of Representatives last Friday, Prime Minister Dean Barrow made claims with respect to the value and cost of B.T.L.  Tonight, we take a closer look at the facts, which when analyzed, appear to be quite outrageously positive, giving the appearance that the acquisition has been a financial catastrophe. Here’s this report:

Dean Barrow

Prime Minister Dean Barrow

“Those in Opposition have suggested that B.T.L. has come at too steep a price. But this is a company that is totemic of nationalism and sovereignty. Furthermore it is already worth a billion dollars, and will earn billions more for Belizeans (Applause) as it capitalizes on its dominance and takes advantage of financing opportunities to continue the rollout of its national broadband plan of fiber to homes and blinding internet speeds. Only the Pharisees who in the first place gave it away for next to nothing, could claim now that its repatriation and the Belizeanization of its handsome profits is at a cost too dear. Mr. Speaker, of direct relevance to the budget is how these payments are financed and how they are reported. The payments were financed by a combination of domestic borrowing through the issuance of Treasury Bills and Notes amounting to approximately three hundred and fifty-four million dollars and from the proceeds of the one hundred and fifteen million dollar sale, to Belizeans, of some of the acquired B.T.L. shares.”

Duane Moody, Reporting

In a nutshell, the PM is saying that B.T.L. is currently worth a billion dollars, and will generate billions more in the future.  Let us look at the facts and crunch the numbers.  First, the book value of B.T.L. per the March 2017 published financial statements was two hundred and seventy-two million Belize dollars. That value will be reduced to two hundred and twenty-seven million dollars when the Government assigns to B.T.L. a part of a debt that they also nationalized back in 2009. It is less than a quarter of the purported value which also equates to only four dollars and fifty-eight cents per share.  Second, B.T.L.’s revenue and profits are no higher now than they were when B.T.L. was nationalized in August 2009, or when they later sold off some of the nationalized B.T.L. shares in 2010.  At the time, the Government sold B.T.L. shares for five dollars each, which placed a value for B.T.L. as a whole of two hundred and forty-eight million dollars.  Third; the Government paid four hundred and sixty-seven million dollars for the nationalized shares, and a further ninety-seven million dollars for the nationalized debt.  That works out to five hundred and sixty-three million dollars paid in total.   Government then sold twenty-three million B.T.L. shares for one hundred and fifteen million and they will also offload to B.T.L. forty-five million of the nationalised debt.  That means GOB has been hit with a total net cost of four hundred and three million for the twenty-two point two million B.T.L. shares that is a value of one hundred and eleven million.   If you do the math, it means that the Government has already lost two hundred and ninety-five million in real money. Fourth; Government has received some B.T.L. dividends over the past nine years, sufficient to have paid off the initial Belize Social Security Board loan to the BTL Employee Trust.  That doesn’t help the Government, but it does mean BSSB weren’t out of pocket.   Not included, are the millions of dollars that have been paid out in legal fees countless unsuccessful court cases since 2009.

All be told, B.T.L. has been a financial debacle with the total four hundred and three million dollars net cost to G.O.B. which is the equivalent to over eleven percent of the total national debt.  It was clearly avoidable, and for which no benefits have been received for three quarters of that debt. Lastly, Government can never use B.T.L. dividend income to pay off the related debt, and that position is only going to get worse as the unpaid interest accumulates. Those are the facts.