BTL employees never got what they wanted from Social Security, Michael Ashcroft did....but, just in time for municipal elections, it has been decided that BWSL employees will benefit from Social Security's largesse. The Social Security Board of Directors has agreed to lend the 226 employees of BWSL $35 million to buy 51% of the shares of BWSL.
It is a 20 year loan, secured by a trust fund which uses a portion of the employees' pension scheme. What portion and a portion of what? Well, those critical details as well as the rate of interest on the loan, are not disclosed in today's release.
In the Sunshine transaction, Michael Ashcroft got 8.5% per year and no interest for the first 5 years, BWSL workers should be expected to get at least that.
And while the nationalization to employees is commendable and will certainly be universally applauded, the fact is that it's a default arrangement: that is, government only sold to the unions because no one else wanted to buy. First, the international investor community was sufficiently warded off by the bi-water/Cascal debacle, and this utility isn't profitable enough to attract Michael Ashcroft. And seeing that there was little international interest, and government has to pay back a loan to re-cover the buy back money, again, Social Security funds were called upon to make it happen, except that in this case, the beneficiaries of SSB's enerosity are employees, and not a British billionaire.
