[B]URLINGTON — Supporters of a local co-op trying to buy Burlington Telecom rebutted Friday arguments against their bid, including claims by Mayor Miro Weinberger, and reiterated they were “very actively pursuing” a purchase of the city’s internet, cable and telephone service provider.
Keep BT Local is one of three remaining bidders, but their $12 million offer is substantially less than the other two. Fiber company Ting is offering $27.5 million and broadcaster Schurz Communications is offering $30.8 million. The city is under pressure to sell the company as part of a 2014 settlement after the city defaulted on loans to Citibank.
The Burlington City Council will narrow the three down to two finalists on Monday night. City Council President Jane Knodell on Thursday said it was “very probable” the co-op would be one of the two selected. The co-op has had broad public support, she said.
Co-op Chair Alan Matson disputed Weinberger’s contention the co-op buyer faced financial, managerial, legal and regulatory challenges.
The local group is borrowing $10 million at 14 percent annual interest, a factor Weinberger cited this week when he encouraged the board to pick the high bidders as the finalists. The mayor also said Citibank would likely sue if the co-op were picked since the bank would receive less.
At a press conference outside City Hall, Matson called the interest rate “no doubt higher than what we’d like” but said the loan from Maine Fiber was structured with lower payments in the first years and higher as time went on. He also said the co-op could buy out the loan after three years and negotiate with a new lender.
Matson said co-op board members have managerial and legal skills. Keep BT Local would retain as many current employees as possible.
The city must select a buyer for Burlington Telecom by the end of the year.
Burlington defaulted on loans to Citibank to finance Burlington Telecom after the city improperly spent $17 million in taxpayer funds on the telecom in 2009. Weinberger vowed to repair the financial damage when he ran in 2012.