Telecoms firm warns of ‘painful few months’ as staff face redundancy due to funding issue
A telecoms firm says it expects to have to make staff redundant after being unable to get a second round of funding.
However, yesterday Horizon founder and chief executive Gilbert Artie Darrell said: “We are trying to raise our second capital round. So far we haven’t had much success but we haven’t had a lot of time to work on it.
“Our original investors, the Bermuda Infrastructure Fund, their funding period had closed so we only had a short amount of time to get the next capital round in the door.
“It’s going to be an interesting and painful few months. We have had to tell staff that some or many staff might not be able to survive the transition.
“We don’t know what that looks like yet because we are still working through the finances and potential new investors.
“We will see what happens through the remainder of this year and next year but I am pretty confident we will come out of this as best as possible.
“We are watching expenses as closely as possible. We weren’t expecting to have to raise capital this quickly — that is what we are working through now and how it affects staff.
“Unfortunately it is the holiday season and it is a horrible announcement to have to make but management and myself, being top of the chain, are working through all the scenarios with our board, with the Bermuda Infrastructure Fund.”
Wave Bermuda Ltd launched trading as Horizon and later changed its name to Horizon Communications. It has about 24 local staff and six local and overseas contractors.
Mr Darrell could not say how many staff could lose their jobs but said anyone who was entitled to redundancy would receive their payments in full.
He said he had reached out to existing customers to let them know that their service will continue.
“My current objective is to maintain our customers, get capital in the door, take care of our employees as best we can and look to grow for 2023 and 2024.
“Our current customer book is quite large and growing. We are on a road map to hit 20 to 30 per cent of the customer base in Bermuda within the next three to five years. We have a few hundred customers now.”
Mr Darrell said the only parish that is not served with residential internet is Somerset and parts of Paget.
The company is one of a few to benefit from investment from the BIF, managed by Fortress Investment Group.
BIF was set up in 2018 and attracted about $88 million in funds from sources including international companies and, for the establishment of the fund, the Government, to help to finance Bermuda infrastructure-related projects.
It was the brainchild of Brian Duperreault when he was the chief executive officer of American International Group.
He was supported in the venture by Don Mackenzie, New Venture Holdings chairman and owner, and Preston Hutchings when he was chief investment officer for Arch Capital Group.
“We believe that if Bermuda is going to maintain its position as a leading global financial centre, we will need to maintain first-class infrastructure, especially in the rapidly changing area of global telecommunications.
“We would also need to open up to additional entrants to bring innovation, jobs and additional competition. Bermuda must also maintain an environment of innovation and diversification as technology further and further governs the success of business, market and communities.
“It will also be of positive news that one of the new licence holders, principally operated by a Bermudian, will also benefit from support of the Bermuda Infrastructure Fund.
“This is in keeping with our promise to create an environment where, as stated in our 2017 platform, ‘ … Bermudian business can thrive, opportunities for Bermudians can be created, and capable, qualified Bermudians can earn opportunities to work, train and succeed at every level …’
“The Government is pleased to see its support for the Bermuda Infrastructure Fund is benefiting a Bermudian’s aspiration to enter this market. It is our hope that further developments like this will continue.”
The Government announced that the Regulatory Authority had issued Horizon with a communication licence effective from August 24, 2020, the same time it issued licences to two other companies also operating selected communications services in Bermuda.
At the time of licensing, Mr Darrell declined to reveal how much the BIF had committed to Horizon, but said the capital needed to launch the network amounted to “many millions of dollars”.
Mr Darrell would not say how much was needed to save the company, just that discussions were continuing with investors and the BIF.
He said he was unsure why the BIF’s funding period had closed, adding: “That’s what I have been told. I don’t know more than that.
“I’m not sure what’s happening on the inside, it’s not really my business to speculate, but I hope they are able to make further investments in the future or that the companies who are involved still stay involved in Bermuda projects.
“I am very happy they invested in us to begin with. I think we were one of the only investments they made and I am really thankful to them for getting us off the ground to bring a new communications standard to Bermuda.”
The Royal Gazette sent questions to Fortress, the Government and the Bermuda Monetary Authority about the Bermuda Investment Fund but had not received any responses by press time.