American Samoa Government Concerned About Bluesky Deal To Sell

Telecom company alleged to have violated terms of American Samoa Hawai’i Cable agreement

By Fili Sagapolutele

PAGO PAGO, American Samoa (The Samoa News, Sept. 20, 2016) – The American Samoa government has voiced concerns with the parent company of the Bluesky Pacific Group over violation of the American Samoa Hawai’i Cable (ASH-Cable) agreement by failing to among other things, notify ASG before accepting the offer from Amalgamated Telecom Holdings (ATH). Attorney General Talauega Eleasalo told Samoa News that “ASG has informed Amper that it is considering legal action to enforce its rights under the ASH Cable Agreement.” 

Late last month, Bluesky’s parent company, Spain-based Amper SA, announced that it had accepted a binding offer to sell its South Pacific holdings to the Fijian group, ATF, in which the largest shareholder is Fiji National Provident Fund (FNPF). 

Samoa News learned last Friday morning that top officials representing Amper, ATH, and FNFP arrived earlier in the day to meet with Gov. Lolo Matalasi Moliga, who appointed his team, led by Attorney General Talauega for discussions with the visiting officials, who are in turn to report and provide recommendations to the governor.

Responding to Samoa News questions about the Friday meeting, Talauega confirmed, “we met” with Amper chief executive officer Jamie Espinosa, ATH general manager Ivan Fong, and FNPF investment consultant Naibuka Sauna.

“The meeting was requested by ATH as an opportunity to meet with the local government and discuss its proposed acquisition of Amper's shares in Bluesky,” Talauega said yesterday morning and described the meeting as “cordial and generally informative.”

While the governor did not participate the meeting, the AG said the governor’s main concerns, as expressed during the meeting, include: the potential loss of jobs due to the acquisition; ASG’s investment in the American Samoa Hawaii cable (ASH-Cable); and securing increased/ stronger internet bandwidth at lower/competitive costs.

Talauega said these issues were discussed and the answers provided by ATH “were general in nature.”

“We have requested that they provide more specificity on these issues,” Talauega told Samoa News, adding that it’s unclear when the transaction acquisition will be completed. “It appears that a final agreement will be executed soon. But the regulatory process may take time.”

According to ATH, the US Federal Communication Commission approval process may take up to 12 months, said Talauega.

Sources very familiar with the US regulatory process tell Samoa News that because the buyer, ATH, is backed and controlled by the Fijian Government that in addition to approval by Federal Communications Commission the purchase of Bluesky Communications in American Samoa and ASH-Cable will likely require the approval of the United States Department of Justice and US Department of Homeland Security and that process will take considerably longer than the one year ATH told ASG it will take. 

These same sources tell Samoa News that because of security considerations it is very unlikely the FCC and US Department of Justice will give approval to Amper’s interest in ASH- Cable being sold to ATH because it is backed and controlled by the Government of Fiji particularly because the relationship between Fiji and the Untied States, while improving recently, has been poor in recent years.

Samoa News also understands ASG is aware of National Security concerns raised because of ATH being a Fiji Government controlled company and is planning to review it with the FCC.

In an Aug. 30th news release, ATH announced that Amper has countersigned ATH’s non-binding Letter of Intent, which conveyed ATH’s intent to acquire all of Amper’s equity interests in its businesses in the South Pacific.  Additionally, the parties anticipate this deal to be finalized in three months, subject to all necessary regulatory approvals and consents being secured.

“Under the key terms of the Offer, ATH will acquire a controlling interest in the South Pacific Units for a cash consideration of USD 79,155,722. The transaction will be subject to requisite regulatory approvals and consents being obtained,” it says. It is estimated that the parties will execute the “definitive agreements during September 2016,” the statement says.

ASH-CABLE

For ASH-Cable, the undersea fiber optic cable connecting American Samoa to Hawai’i, and the other spur connecting American Samoa and Samoa, ASG is the minority shareholder.

Samoa News asked Talauega if ASG’s shares in ASH-Cable were discussed and the governor’s stand on ASG’s investment in the fiber optical cable. Additionally, what is going to happen to ASG’s shares when ATH takes over?

“ASG has notified Amper that it is in violation of the ASH Cable Limited Liability Agreement by failing to notify ASG and failing to honor ASG's right of first refusal before accepting ATH's offer to buy the shares of ASH Cable owned by Amper's subsidiary eLandia,” Talauega explained.

(As reported last week Friday, eLandia International, based in Miami, Florida, owns the majority of the shares of eLandia Technologies, which owns the majority of shares in ASH-Cable, of which American Samoa is a minority shareholder. ASG invested $9Mil for these shares.)

“ASG has informed Amper that it is considering legal action to enforce its rights under the ASH Cable Agreement. We will continue to monitor and evaluate information about this proposed transaction as they become available,” said Talauega.

“For now, I see no reason for ASG to alter its position with respect to enforcing its legal rights of notification and first refusal under the ASH Cable Agreement,” he added.

Samoa News notes that prior to its conclusion, the deal is required to undergo a review for regulatory approval by the US Federal Communications Commission, who is represented locally in American Samoa by the Office of the Governor as the Telecommunications Regulatory Commission (TRC).

Besides meeting with ASG, Samoa News understands that officials from Amper, ATH and FNPF also met with local Bluesky Communications management. Besides American Samoa, the Bluesky Pacific Group includes operations in Samoa and the Cook Islands.

Samoa News will be reporting later in the week on an offer Bluesky’s Management and employees and investors from American Samoa, Samoa and overseas presented to Amper to purchase the Bluesky Pacific Group with includes in American Samoa Bluesky Communications, Moana Cable and 66% ownership of the American Samoa Hawaii submarine cable, and Bluesky Communications in Samoa, the Cook Islands and New Zealand.

Rhonda Annesley, Samoa News editor contributed to this story.

The Samoa News
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