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Aliv In ‘Phenomenal Position’ Financially

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas’ new mobile operator is in “a phenomenal position” financially, having secured $186 million in start-up funding prior to this week’s planned capital raising.

Johnny Ingle, Aliv’s ‘chief champion’ (chief marketing officer to many), told Tribune Business that investors could have “the utmost confidence” in its impending $30 million bond issue, given how the new operator had delivered on multiple commitments since its November 23 launch.

Arguing that Aliv had fulfilled promises to offer choice, value and service quality to Bahamian consumers in just four months, Mr Ingle pledged it will “not rest on our laurels” as the operator continues to expand its network infrastructure into the Family Islands.

He added that Aliv’s subscriber numbers had continued increasing to the current 50,000, with the operator also planning to grow its ratio of Bahamian to expatriate employees, which currently stands at 16:1.

While Aliv’s latest $50 million capital raising, which combines the bond issue with $20 million in bank credit, will help finance the further nationwide roll-out of its mobile network, Mr Ingle said it would merely add to already-deep pockets.

Apart from the $136 million in start-up financing provided by its two shareholders, BISX-listed Cable Bahamas and HoldingCo (which is 100 per cent owned by the Government), Aliv also received “in excess of $50 million” in vendor financing from its main technology provider, Huawei.

“Financially, the business is very, very strong,” Mr Ingle told Tribune Business. “We had secured from last year everything we needed to get secured. We’re already financed. We had our money before we started.”

He added that the bond issue, which will launch either tomorrow or Wednesday via private placement, was structured as an attractive opportunity for Bahamian institutional and high net worth investors.

“This is an opportunity for very canny investors in the Bahamas to make a very sound investment. There is absolutely every reason for investors looking at this opportunity to do so with the utmost confidence,” Mr Ingle said.

“You’d expect me to say that, but take a step back. The financing is already in; $50 million on top of the $136 million, which was secured from our technology provider. When you have vendors as big as this one invested, it’s a phenomenal position to be in.”

He suggested that Huawei’s investment, as well as Aliv delivering on its commitments to-date, should give potential Bahamian investors further confidence ahead of the bond issue’s launch.

“We have, in a very short space of time, built a phenomenal business,” Mr Ingle said. “We have over 50,000 customers at this stage from a position of launching on November 23.

“We are already on track against our business objectives. No one can argue against our performance to-date. Everything we’ve said, promised to provide, those things we’ve already delivered on, and we’re not resting on our laurels. It’s full steam ahead for the Family Islands.”

Aliv remains in capital intensive mode as it moves to expand its network into Exuma, Bimini, Andros and the other Family Islands, and fulfill the roll-out obligations it committed to hit in its license from the Utilities Regulation and Competition Authority (URCA).

URCA previously confirmed that the operator had hit its first service quality and roll-out targets, which were 99 per cent coverage on New Providence and 80 per cent on Grand Bahama.

Mr Ingle said this represented “the first of many” such deadlines that Aliv planned to meet in accordance with the build-out and service quality targets set out in the license received from URCA.

He pointed to “the rapidity” with which Aliv had constructed two LTE (Long Term Evolution technology) networks across New Providence, Grand Bahama, Abaco and Eleuthera, plus “the consumer plans never seen before in the Bahamas”.

Mr Ingle noted the “free service” option that will be provided to all Aliv’s corporate customers until April 25, 2017, the date that coincides with the launch of mobile number portability and their ability to keep the same number when switching provider from the Bahamas Telecommunications Company (BTC).

The Aliv ‘chief champion’ said the operator had also delivered on promises not to charge customers for accepting incoming fixed-line calls, and to base charges on per second, rather than per minute, billing.

“We launched with all of them, and have not changed any of them,” Mr Ingle told Tribune Business. “We said we’re going to do it, have done it, will continue to do it and not rest on our laurels.

“We are providing an exceptional network, exceptional value, and exceptional service for consumers of the Bahamas. It’s a choice that is very different from what existed previously.”

Mr Ingle said Aliv had established its own graduate trainee programme, and links with the National Training Agency(NTA), as it bids to increase the Bahamian component of its workforce.

Pointing to Aliv’s 250-plus Bahamian staff, and 90 local contractors, he revealed that the ratio of Bahamian to expatriate employees was 16:1.

“It’s not that the place is overrun with foreign executives,” Mr Ingle said. “It’s not. A lot of that came from our technology requirements at the initial stages.

“We’re a company in the business of providing service; we’re not a company in the business of being service. That’s a fundamental difference in character, philosophy.”

As revealed by Tribune Business in February, Aliv’s $30 million bond issue will be split into two equal $15 million tranches.

One tranche, with a 10-year term, will carry an interest coupon of 8 per cent. The second tranche, which will have a 15-year maturity term, will carry a dividend of 8.5 per cent to compensate investors for the longer term and extra risk.

Comments

John 8 months, 3 weeks ago

Eight percent coupon rate so tempting..yes salacious.

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