By Al Edwards, Business Co-ordinatorTHE CORPORATE building located at 36 Knutsford Boulevard, New Kingston that houses a retail branch of NCB, and the Jamaican operations of the telecommunications company Centennial is up for sale at an asking price of US$5million.
The impressive edifice formally owned by Mutual Life was acquired by FINSAC as part of its efforts to rehabilitate the financial sector. It in turn was sold to Centennial one of the wireless telecommunications companies that acquired a licence from the Government at a cost of approximately US$45 million some two years ago. Centennial acquired a 800 Mhz licence and uses CDMA technology, and aimed to have 47,000 customers in its first year of operations. To this end the building located at Knutsford Boulevard seemed a worthy investment as the company looked to expand its operations in Jamaica.
However, its inability to secure tower space throughout the island, the decision to only service the Kingston and the St. Catherine area added to the fact that it only managed to capture a customer base of less than 10,000 while its rival Digicel went on to secure a customer base of 500,000 in its first year, meant that the company's investment in Jamaica was running into trouble.
Earlier this year, Centennial Communications the parent company announced that it had sold its 51 per cent interest in its Jamaican wireless business, Centennial Digital Jamaica Ltd. to Oceanic Digital Communications, the 49 per cent stockholder in Centennial Digital Jamaica. In addition, Centennial announced that it had entered into a definitive agreement to sell its 60 per cent interest in Infochannel, a Jamaican Internet service provider.
In July, Centennial announced a write- down of its Jamaican assets, as well as certain non-Caribbean undersea fibre optic cables, totalling US$34 million.
"While our Jamaican operations had long-run growth potential, we believe these transactions are in the best interests of shareholders.
"The sale of our Jamaican businesses will immediately reduce our consolidated debt level by US$45 million and eliminate the need to invest additional capital, said Centennial's chief executive officer, Micheal J. Small.
According to figures last published in February, Centennial employed 178 people directly. CDJ's chief executive officer, Jim Benada said that the company was looking to increase its staff compliment to 400 as it looked to expand its operations in Jamaica but that did not come to pass with Oceanic hoping to atone for Centennial's misfortunes.
Speaking to the Financial Gleaner yesterday, Oceanic's President, Al Gencarella said: "Yes we are looking to sell the building and we have engaged a realtor to negotiate on our behalf. We are looking for a sum of approximately US$5 million and already some companies have expressed an interest in the building. Oceanic will remain housed in the building as it contains its switching facility. NCB will also continue to use the building as one of its branches servicing the corporate area."
Oceanic's immediate focus will be the expansion of its CDMA network and a complete reorganisation of its sale distribution network. The next phase of the build out will increase service coverage to the rest of the island to include Montego Bay, Ocho Rios and all major towns and roadways. This is to be completed through local project management and contractors.
