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Thursday, April 24 2014 @ 10:26 PM EDT

Cabinet Council Approves Sale of Cable & Wireless Shares

Money MattersThe Cabinet Council delegated to the Ministry of Economy and Finance the authority to submit to the National Assembly an amendment to the Law that restructured the National Telecommunications Institute (Intel). The delegated authority has a goal the sale of 24% of the shares the State holds in the Cable & Wireless company, and to deposit the remaining 25% in the newly created Savings Fund of Panama or Sovereign Fund. The Deputy Finance Minister Mahesh Khemlani, who sustained the proposal, explained that 24% of the shares will be sold in a public issue through the Panama Stock Exchange. Khemlani said Panamanian investors who are interested can buy the shares, which he said was a "massification and democratization actions tenure." "Now any Panamanian can own the shares and receive the dividends, and this gives access to liquid financial instruments and fostering a culture of cost-effective investment," he said. The vice minister also said "now the state will come to fulfill the role it always should have fulfilled; the regulator." This provision of the Cabinet Council comes amid discussion in the Assembly of Bill 486 that allows the sale of shares in the distribution companies and electric power generation. (Telemetro)

Editor's Comment: The government is selling these shares for a reason. Mostly, because they don't want to be holding them anymore. The Cable & Wireless deal was a good investment back at the time when the state owned telephone company was being privatized. Then, C&W had a monopoly on residential telephone services, and there practically were no cellular telephones in the country. But now, 15 years later, the Panamanian telecommunications networks have been largely deregulated so that there are many other companies and service providers who can install a telephone line in your house, like through the cable television provider Cable Onda, for example. And cellular phones are replacing the standard "land lines" to a large extent. So, it makes sense from a business point of view to dump the C&W shares now, while they are still holding their value. But the government can't really come out and explain this very well, because what they are saying is "you can buy this crap, because we don't want it." It would hurt their "tender" and the state might get less money as a result of the sale.

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