BURLINGTON TELECOM SETTLEMENT AGREEMENT AND PROCESS OF SALE
FREQUENTLY ASKED QUESTIONS
Has Burlington Telecom been sold?
The agreement between the City of Burlington and Citibank utilizes financing provided by Blue Water Holdings LLC (“Blue Water”), an entity formed by local businessman Trey Pecor with the backing of Merchants Bank. In this transaction approved by the Public Service Board, Blue Water has purchased equipment from Citibank and other assets of Burlington Telecom, and leased all assets back to the City in a structure similar to the original Citibank lease. The City continues to control and operate BT, while evaluating opportunities for long term purchasers or partners. The City’s focus is on continuing to grow BT.
The Blue Water Agreement leaves the City with the choice of who will eventually buy BT, subject to a financial threshold. This critical provision gives the City four years to find a purchaser or partner with a vision for BT that is aligned with the City’s and one which will continue to provide a positive community and economic development impact. The more the local community supports BT by using its services, the better the outcome.
Will this affect my service?
Absolutely not. BT will continue to operate as usual with no change to your service..
Do I need to find a new Internet/phone/cable provider?
BT is here to stay. We will continue to provide all of the services customers expect and rely upon.
How long will the City of Burlington own BT?
The refinancing gives the City four years to select a buyer or partner for BT. Many of the transactions envisioned contemplate the City continuing to hold a long term interest in BT.
Burlington Telecom Advisory Board Timeline:
Agree on sale process and timeline to forward to City Council.
City Council to approve timeline and process.
Finalize list of potential interested parties.
Complete e-Diligence site.
Launch Sale Process
Initial diligence & Meetings with Burlington Telecom
Offer deadline (June 1)
Discussions with potential finalists (June 15-30)
BTAB Review and Recommendation (June 30)
Finalists Present to City Council
Finalist Detailed Diligence
City Council Approval (July 31)
Legal document subject to Public Service Board Approval (Sept 29)
City Council Approval to Forward to Public Service Board for Approval (Oct 9)
Can BT be owned by the Keep It Local Co-op?
Yes, if the co-operative secures the appropriate financing commitments, it can be considered along with other potential buyers or partners.
Will the $16.9 million be paid back?
The settlement of the Citibank lawsuit and the Blue Water financing provide the best opportunity for the City to recover some of the $16.9 million. When BT is sold, the City will receive the following percent of net sale proceeds (after payment to Blue Water of the unamortized balance of $6 million and other deal costs and deductions and a split with Citibank):
- 25% within 0 to 3 years
- 17.5% within 3 to 4 years
- 12.5% within 4 to 5 years
- 5% after year 5
BTAB Criteria Meetings
BTAB Criteria Meeting Notes #2: Meeting Notes
BTAB Criteria Meeting Notes #3: Meeting Notes// Petition // Submissions //Survey Results // BT Criteria Online Survey Additional Public Comments // Keep BT Local Petition // Pecor Letter // Additional Statements Submitted Regarding Criteria of Sale // Goodkind Letter