Grenada’s lone power company which is owned by a USA company based in Florida has served notification to Government that it plans to sell the majority of shares, and is giving Government the first opportunity to purchase the shares.
The Government said it received notification from GRENLEC’s majority shareholders WRB Enterprises through its locally registered company, Grenada Private Power Limited, confirming its intention to divest.
The original sale agreement makes it mandatory for the majority shareholder to give Government first preference to reclaim control of the company which was privatized by the Nicholas Brathwaite National Democratic Congress administration in early 1990s.
According to the terms, if Government decides not to make a purchase offer for the shares within the 30 day period, then the Florida based company will be notified. Government has thirty days to respond and if Government refuses the offer WRB can then proceed to seek another buyer.
A news release from the Government Information Service said that Prime Minister Mitchell was in a jubilant mood on receiving the letter. However, he was quick to clarify that government’s aim is not to own or manage GRENLEC.
“Dr. Mitchell said his administration’s role is to facilitate the process in which the company can be managed by a buyer who understands the needs of the population, and which can ensure that electricity is offered at the most affordable costs to the people of our nation,” said the release.
“The company’s decision to sell GRENLEC shares is probably the best news so far of this Government. The electricity company was the birthright of our nation, and as Prime Minister, I believe the previous administration had given away our birthright for almost nothing,” Dr. Mitchell said on Friday.
“I am less concerned with who owns GRENLEC. My major concern is to ensure that whatever third party buyer the government attracts understands the needs of the nation, and ensures that electricity is at a cost that everyone can afford,” he said.
The notification to repurchase the shares coincides with a second request to Government in recent months for GRENLEC to raise electricity rates. However, the government has repeatedly indicated that it is not willing to entertain the request for a hike in electricity rates.
In January 2013, the then Tillman Thomas led National Democratic Congress which lost the 19 February general elections confirmed that GRENLEC had made a similar offer. The administration said said it was not in a position to purchase controlling shares in the electricity company but was negotiating a possible reacquisition of a portion of the company within a year. “We cannot buy the shares. We do not have the money to buy them,” said the former Energy and Finance Minister Nazim Burke.
WRB Enterprises which owns 61.4% of the Grenada Electricity Company (GRENLEC) was requesting EC$100 million for Government to retake control of the company. Back then, Burke said that the Barbados-based Light & Power Holdings (LPH), which is a subsidiary of the Canadian firm Emera Inc, had “reached an understanding” with WRB and is close to completing a purchase agreement for the controlling shares in GRENLEC.
Ownership of the utility company is distributed among Grenada Private Power, Belize-based Eastern Caribbean Holdings (ECH), the National Insurance Scheme, the Government of Grenada and the general public.
The majority of WRB’s stake is held in subsidiary Grenada Private Power, which owns 50% of GRENLEC.
by Linda Straker
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