By NEIL HARTNELL
Tribune Business Editor
Cable Bahamas yesterday confirmed it has moved into the second stage of its balance sheet restructuring by unveiling the early redemption of $30m-plus in preference shares.
The BISX-listed communications provider confirmed in a statement that it plans to pay investors in its Series eight, ten and 12 series preference share classes their US dollar principal as at September 30, 2020.
"Cable Bahamas confirms that it will waive the 90-day advanced written notice requirement, and will in lieu of same pay interest for the 90-day period through to December 30, 2020," the company said.
Sources familiar with the situation told Tribune Business the total repayment will be around $35m-$38m, with one adding: "They're [Cable Bahamas] busy basically looking at optimising their balance sheet" using the proceeds from the $301.5m sale of Summit Broadband last year.
Franklyn Butler, Cable Bahamas chief executive, could not be reached for comment but the preference share redemption is the second phase of the company's balance sheet recalibration following the repayment of $99m in bank debt.
Asked previously how Cable Bahamas planned to use the Summit proceeds, Mr Butler said: “We are going to be working with our bankers in the first instance to look at the best capital structure of the proceeds. As you appreciate, we have a fair amount of bank debt that we will address with the bankers as a matter of priority.
“After that we will be addressing the preference shareholders and ordinary shareholders in the coming days and weeks once we get our hands around the balance of the proceeds. This is a huge transaction for Cable’s future. It deleverages our balance sheet and allows us a lot more flexibility to leverage our market share, both in mobile and fixed services, in the country. This is a significant debt burden we will alleviate with this transaction.”
He also made no secret of Cable Bahamas' need to to repay more than $300m in preference share debt over a five-year period from 2023 to 2027. Mr Butler acknowledged that the ongoing COVID-19 uncertainty could impact plans to repay investors, saying: "There’s a lot of preference share debt that matures in the not-too-distant future.
"I think most of it is in 2023 and 2024; I think around that time. I’m sure we may be able to refinance it, but in uncertain times no one wants to be refinancing that for sure.”
Cable Bahamas’ annual report for 2009 shows that $114.5m worth of preference share principal is due for repayment to investors in 2024, with a further $75m maturing the following year. Before that, some $15m is due for repayment in 2023, and just over $28m in 2026.
And repayments of almost $69m in preference share debt taken on by Aliv, the mobile affiliate in which Cable Bahamas has a 47.25 percent equity stake, complete with Board and management control, must start being repaid in October 2023.