LIME to offload field operations - HY losses mount to J$1b

LIME Jamaica is selling off a piece of the company to a global telecoms company, the company disclosed this week, further clarifying the exploratory talks under way with a global telecoms provider.

"The company is in the process of exploratory talks with a global service provider to examine the feasibility of the sale or disposition of that part of the business comprised of its field service operations," said LIME in a precise statement to shareholders.

"The talks are geared at examining opportunities to achieve cost savings and improved customer service."

LIME is saying little about the talks, citing stock market rules in Jamaica and the home market of its unnamed partner. But the field operations would likely include the mobile network, installation and repair infrastructure and some, if not all of its fixed line or PSTN operations.

In the midst of the discussions, the company also announced the resignation of its vice-president of finance Grace Wyatt, who left the company on October 31.

It appears, said one telecoms source, that British parent Cable and Wireless is selling off the assets of the Jamaican operation, whose debts have now accumulated to J$7 billion, potentially leaving LIME in control of the marketing and selling functions. The majority of the company's value would be in the mobile network, into which LIME continues to pump fresh capital to upgrade and expand its 3G network, sources said.

Big business

The talks with the buyer are being steered from London, Wednesday Business was told. It is understood that the acquisition partner, a global services company, has done big business in the recent past with LIME Jamaica during the reconstruction and reconfiguration of its mobile and broadband services.

Meantime, LIME Jamaica continues to bleed at the bottom line - losing half a billion on falling sales in the second quarter ending September and J$1.14 billion in the half-year period. Revenues were down by one billion to J$9.4 billion in the six-month period.

The net losses, though steep, was an improvement on the HY 2009 results when the company lost 10.93 cents per share, compared to 6.81 cents this cycle.

In the past year, LIME has booked charges of J$1.2 billion linked to the write-off of its old mobile network. But the company continues to depreciate its assets at about a rate of J$1 billion per quarter. Its remaining fixed assets at balance sheet date was valued at just under J$24 billion.

business@gleanerjm.com