Hawaii opponents of the Carlyle Group’s planned purchase of Veriz...
Hawaii opponents of the Carlyle Group’s planned purchase of Verizon’s landline telephone operations in that state told the Hawaii PUC they feared the buyer’s real goal is to quickly resell the property for profit rather than making a long-term…
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commitment to operate the business. But the IBEW, which represents many Verizon Hawaii employees, said it supported the $1.65 billion deal that would rename the company Hawaiian Telecom. Consumer and competitor interests at the PUC hearings on the sale said the Washington, D.C.-based investment group had a reputation for buying lackluster companies, overhauling them and selling them for a profit. Carlyle managing dir. William Kennard said he couldn’t rule out the possibility. He said that if Carlyle’s planned improvements made the company attractive enough to interest would-be purchasers, “that’s a good thing.” He stressed that his firm planned major investments to upgrade the aged network and planned to honor Verizon’s labor agreements through expiration in 2007. The IBEW said it supported the sale because Carlyle’s business plans would create as many as 100 new jobs. But IBEW officials said they were concerned about what would happen to the roughly $200 million surplus in Verizon Hawaii’s pension fund. The fund and pension obligations will transfer to Carlyle in the deal. The IBEW said the pension surplus should be returned to Hawaii phone customers since they've been contributing to it through phone rates. But Carlyle officials said such a major change to the pension fund would require renegotiation of the sale.