NEWS | Wednesday, 16 April 2008

Tecom never invested additional funds into Go

The promised Lm30 million came from Maltacom’s cash pile

David Darmanin

When in 2006, Minister Austin Gatt was dealing with UAE-based company Tecom over the sale of government’s 60 per cent stake into Maltacom, it was announced that once the shares are taken over, through its subsidiary EITL, Tecom would “inject Lm30 million in new technology over three years to bring Malta incumbent operator’s infrastructure up to date but more importantly to allow it to be in a position to offer any service that will be required.”
At the time, it was unclear whether the Lm30 million would originate from Tecom’s bank account or whether this amount would simply be spent off Maltacom’s cash pile.
Go’s 2007 AGM held last Friday clarified the situation, seeing that no additional investment was made by Tecom or EITL into Go last year.
Asked for his comments, a spokesperson for the Ministry for Investments said: “The main objective was not the origin of this capital, but the actual investment of the capital by Go’s current main shareholder. This is a commitment which Go is implementing to our satisfaction and more importantly to the satisfaction of its customers.
“It should be said that since Tecom owns 60 per cent of Go, 60 per cent of the investment that Go undertakes is as a consequence made by Tecom. Tecom paid for their shareholding in Go. Since they paid for them, their share of the company and its assets are theirs. Incidentally the deal with Tecom on the sale of the shares the Government owned is particularly binding on Tecom in that it committed them to use Lm30 million of the company’s assets in investment. In principle when someone buys a company they do so to be free to do as they please with its assets.”
Explaining how the money is being invested, the spokesperson said: “A significant example of this is the investment into another submarine cable announced by Go a few weeks ago. This was entirely consonant with our ‘Smart Island’ aspiration of considerably improving Malta’s international connectivity on which the entire ICT community – existing and yet to emerge – rely to be in a position to compete effectively for business with the rest of the world. Theirs was a significant investment that will quite rightly give a return to Go but will give a return as well to our entire community as it strives to become ‘The Smart Island’.
“This was another important result of the way the Government conducted its privatisations seeking more than a good price for the shares and focusing on ensuring a continued stream of added value to our economy. This week’s announcement by Rimorchiatori Riuniti – new owners of Tug Malta – that they are investing €70 million in investment in new tugs to use Malta as a base for Mediterranean off shore operation is a case in point. Another case in point is the investment undertaken by the new owners of Malta Freeport Terminals, CMA CGM that in summary has signified the creation over a few years of 700 new jobs.”