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City Evaluating Other Offers To Buy Thames Valley Communications

Mayor Marian Galbraith said an investment firm is looking at the offers to see if they are viable and offer any better value than the sale to CTP for $150,000.

 

Groton City Mayor Marian Galbraith told Representative Town Meeting Wednesday it has received other offers to buy Thames Valley Communications, the cable company the city borrowed $34.5 million to build, then agreed to sell last month for $150,000.

The sale was delayed to see if other offers would come in before Jan. 7, and she said some did. She said they are being evaluated by an investment firm and the city’s attorney to see if they are viable and offer more economic value. She said she could not discuss how many offers were made or who they were from.

She said she would call an executive session of the City Council early next week to decide whether one of the new offers is better, or whether the city should stick with the offer made by to CTP Investors, LLC.

The mayor and City Council approved an ordinance authorizing the sale of Thames Valley Communications to CTP on Dec. 17, but gave itself the additional window to see if any other offers would come in.

Galbraith explained to Representative Town Meeting

“We had a business model that ended up not fitting the economic times we were in,” she said after the meeting. “And look at how many companies that happened to? We were one of them."

From 2006 to 2008, the city borrowed $34.5 million to build and expand the Thames Valley network from Gales Ferry to the Rhode Island line. The idea was to cable viewers choice and ultimately turn a profit.

But just as the network was finished and trying to build its customer base, the economy tanked, AT&T announced it was moving into Groton and Comcast fought to defend its territory. The small, new cable company ended up with flat sales and the city found itself subsidizing the operation at a cost of $2.5 million a year.

The debt that remains from Thames Valley Communications is now about $27.5 million and belongs to Groton Utilities.

Galbraith said it would have no impact on the town, and she does not expect it to result in any increase to Groton Utilities ratepayers.

She also said the city hired a consultant to improve cash flow and the company’s bottom line, which helped.  In addition, she said the city is going to refinance a considerable amount of the debt as non-taxable, which will further improve the situation.

GlpGeorge January 10, 2013 at 01:02 PM
Do you actually believe there will be "no increase to to Groton Utilities ratepayers" because of the 27.5 million dollar debt? Where else will the money come from to make the payments? This is the same kind of crap they were pushing when they started...that it would not effect the town or the Utility costomers at all. If I am forced to use Groton Utilities to supply my electricty, and They incurred 27 million in debt, then some of my monthly utility bill will be paying the debt. Any Questions?
D Paul January 10, 2013 at 09:05 PM
It must be nice to invest tax payer funds with no risk to yourself, collect salary, benefits, and contribute to your retirement... Federal, state and local government should not be allowed to use tax dollars to start companies.
Thinkurs January 10, 2013 at 09:33 PM
Surprise, surprise, surprise!! Finally, since City residents Boucher and Dempsey, blew the lids off on the City’s massive losses before their Mayor and Utilities Board quietly buried the books and offloaded TVC, the offers are coming in! If only this fiasco was uncovered sooner by the public, TVC’s sale might've had a better offers. Well done Mike and Jay, in uncovering the City's shoddy-efforts to sell TVC as well, again, behind their closed doors! The City’s past comments in print and public was, they had only 1 offer, since hiring a broker and been searching for over a year?!! Galbraith said. "It's not like we rejected a more lucrative offer. There is no better offer. I wish there was." The Day 11/27 Galbraith said "the town had one partnership offer, The Day 12/04
Dave January 10, 2013 at 10:06 PM
It doesn't have anything to do with any recession like Galbraith is saying. TVC's failed because there rates weren't competetive!!!!! There is a lot of competition for television service in Groton including Comcast, TVC, Dish Network, and DirecTV. No one is going to bother switching providers unless it’s going to save them money. TVC promised their rates would be significantly lower by minimizing profits. For whatever reason, this promise never materialized so it is no surprise they failed.
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