The Government of Belize has reached an agreement for settlement, subject to approval of the National Assembly this week, with Fortis Incorporated, who now concedes majority ownership in Belize Electricity Limited (BEL) to the Government. The Current Administration Nationalized BEL in June of 2011 after Government’s Public utilities Commission refused to give Fortis a requested rate increase and Fortis had predicted rolling blackouts. Government seized Fortis’ 70% stake in the Company which led to a bitter 4 year Court battle which made its way to the Caribbean Court of Justice in December of 2014 and January of 2015. And now with the final court ready to give its Decision on the nationalization of BEL, the Government has struck a deal with Fortis. Fortis now gets back almost half of its shares; 47% to be exact and will now own 33.3% of the shares; Government will pay as compensation some US$35 million (BZ$70 million) to Fortis. Prime Minister Dean Barrow at a press conference this afternoon hailed the settlement as a “turning of the page” and “revitalization of the relationship” between Fortis and GOB, as the former still holds and operates producer company Belize Electricity Company Limited (BECOL). He called the deal “good for Fortis and good for Belize.”
Hon. Dean Barrow: As compensation totality for GOB’s original acquisition of all of Fortis’ 70% shareholding in BEL. GOB will now pay to Fortis 35million US dollars in cash, 70 Million Belize dollars
and GOB gives back to Fortis a 33 and a third shareholding interest in BEL. Government keeps the rest of 70% it had acquired and together with SSB, which has something like 26.9%, we will continue to own well in excess of the 51% mandated in the constitution and required for majority ownership and control. We expect the new arrangement to serve BEL and Belize well. Fortis’ long established multinational role in energy generation and distribution plus its familiarity with our local circumstances should see it contribute greatly to BEL’s further advanced and development.
The Prime Minister noted that it was the determination of Fortis’ new chairman, Barry Perry, who succeeded H. Stanley “Stan” Marshall at the end of 2014, to bring the matter to a close and move on, and within a month of his appointment this summer and first visit to Belize to meet with the Prime Minister, the settlement was reached. Perry, for his part, accepted his role as a biblical “Shiloh” – one who is sent to bring peace, between his company and Belize.
Barry Perry: At one point in our negotiations the Prime Minister referred to me as the ‘Shiloh’ I have to admit I did not know the meaning of the word, I did look it up however. It’s a biblical term and it means one who brings peace. Prime Minister, I hope that what we’ve done today will be the start of a long and peaceful relationship between Fortis and the Government of Belize. Thank you very much.
The Prime Minister also maintained that Belize had avoided dire predictions of a massive repayment for compensation and consequent troubles with foreign direct investment.
Hon. Dean Barrow: We believe in our philosophy, and that philosophy, premised on nationalism convinces us that it is right and meek and proper for the government and people of this country to have majority ownership of the essential utilities. You say that it won’t politically have any tremendous impact right at this point in time. I don’t know, I have to be careful. We don’t want to be resurrecting old ghosts, but at the time we did the acquisition, I certainly had the sense that it was extremely popular. In fact that release from the chamber that you made reference to actually had them sort of apologizing saying that, well that they accept this move is extremely popular but they have to see it through another lens. So I’m not sure that your premise is entirely correct when you say that the confirmation of the governments and people’s ownership of BEL at a price that is more than fair, I am not sure you are right when you say it will not stricken the sort of responsive coder in the bosom of the Belizean people.
The House and Senate meet this week to authorize the deal and once that is reached the company will be compensated. But what happens to the court case with Fortis that is sitting before the Caribbean Court of Justice (CCJ) for decision? The Prime Minister told us that now goes away.
Hon. Dean Barrow: That’s what the compromise means that case will now be proceeding.
Reporter: In terms of notifying the CCJ .
Hon. Dean Barrow: Yes yes. I believe the lawyers are doing that shortly. Yes.
Reporter: Okay and you know tangentially that the BTL cases were held up with that and so is this a module for potentially settling that matter? I’m asking because they were brought together and in similar circumstances.
Hon. Dean Barrow: Well, maybe you could get your colleagues at Channel 5 to ask their own Lord Ashcroft that question.
Fortis gets three directors on the Board, one for each ten percent of shares it holds. It has identified two familiar names, former CEO of the company from its majority ownership days Lynn Young, who is now CEO of Belize Electric Company Limited (BECOL), and former president of the Belize Chamber of Commerce and Industry (BCCI), Kay Menzies, as prospective directors; the third is Fortis’ Executive Vice President, Eastern Canadian and Caribbean Operations, Earl Ludlow. The agreement will be publicized as part of the ratification in both Houses. With current profit margins of BEL at over 35 million Dollars in 2014, Fortis’ reduction in shares from 70% to 33% puts the company in a sweet position. Fortis will still take home triple the profits it took from BEL in 2011.