Four new directors at Maltacom

Tecom Investments yesterday made sweeping changes to the Maltacom board of directors - retaining chairman Sonny Portelli - as the island's telecoms company announced that pre-tax profits have risen by a third.

In a statement issued after Maltacom's annual general meeting yesterday, the Dubai-based majority shareholder appointed two US nationals, a Frenchman and an Indian to the board.

The four government-appointed directors on the eight-man board - the other three are elected by the shareholders - officially tendered their resignation yesterday at the conclusion of Maltacom's AGM.

Afterwards, Tecom's chief marketing officer Michael Foley told The Times: "This is a very important investment for us," as he stressed the importance of Tecom being directly represented on the board since it now owns 60 per cent of Maltacom. The new majority shareholders are bound to be pleased that Maltacom increased last year's pre-tax profit of Lm13.2 million by 33.6 per cent.

Mr Portelli certainly was, saying: "The results are very good... Maltacom is in good shape and the resources are there. There is no doubt that it has human resources with excellent skills."

Go Mobile was again a major factor, bringing in Lm4.7 million, as was Data Stream which made Lm1.8 million.

Maltacom's acting chief executive officer, Joseph Azzopardi, said that although the group had registered only a marginal increase in revenue, it had managed to cut costs by 10 per cent and reduce the amount it is owed by debtors by 36 per cent to Lm15 million. This all meant that the dividend on each share increased by 52 per cent.

Mr Foley also said that Maltacom would retain its name for the foreseeable future. "This is a Maltese company and remains a Maltese company. It can't be anything else. We're the ones who have to adapt."

The government officially handed over its 60 per cent stake to Tecom on Wednesday in a deal worth €220 (Lm94.4) million.

Under the agreement with the government, Tecom has agreed to invest Lm30 million in Maltacom in the first three years. It has also undertaken not to delist the company from the stock exchange, increase its shareholding or sell any of its shares before January 1, 2009. Nor during that period will it impose any redundancies on Maltacom's 1,500 or so employees.

Mr Azzopardi said that demand for fixed lines was virtually the same as 2004, but Maltacom had gained most of the lost VOIP business and broadband penetration had shot up by 50 per cent last year.

The AGM was a relatively muted affair. The main complaint from the minority shareholders was that the board was neither informed about, nor involved in, the negotiations held between the government and Tecom.

"We didn't have anyone to protect us in this discussion," one man from the floor said to a round of applause, while another argued that the company should have first been offered to Maltese before foreign companies were allowed to bid.

In response, Mr Portelli pointed out that the new board would contain the same number of shareholder-elected directors as the existing one. "That's a representation of 40 per cent of you."

He also revealed that Maltacom's management had heaved a huge sigh of relief that the privatisation issue had been settled and were "very comfortable with the choice".

Last Wednesday, Tecom's CEO Ahmad Bin Byat said the deal heralded a new beginning for Maltacom and the Maltese economy.

And the Dubai company's senior business development manager Nikil Patil said the company intended to use Maltacom as the catalyst "for sparking the development of Malta as one of the leading ICT-based economies in the region".

This will start by maximising the capabilities of fixed line as well as mobile telephony before moving on to quadruple play, which is a service bundle that includes high-speed data, telephony, TV, and wireless.