In March, 2010 SaskTel announced the divesture of Hospitality Network (HospNet) and AgDealer. As well, SaskTel will be selling its real estate investment in Saskatoon Square and remain a tenant of the property.
According to the Leader-Post, HospNet, also known as Hospitality Network, rents TVs and phones to hospital and nursing home patients across the country. Hospitality Network Canada Inc. had operating revenues of $29.4 million, in 2008. AgDealer, which is a trader-type magazine and website for agricultural equipment produced through DirectWest, while Saskatoon Square is a commercial building located in Saskatoon.
SaskTel stated, “The sales process, which could take several months, will begin following the selection of the company or companies to provide brokerage services.”
In alignment with the Saskatchewan First Policy which was first adopted in 2008, the government is forcing our Crowns to sell off their non-core investments. This is yet another example of our current government piecing away our Crown Corporations, regardless of whether or not they are profitable.
The first to sell was AgDealer in November 2010 to FBC Communications Limited Partnership, a wholly owned subsidiary of Glacier Media Group.
In mid December, 2010 the sale of Saskatoon Square real estate was announced. SaskTel owned 70% of the building and occupied 20% of it. Dundee Real Estate Investment Trust purchased the property for $50 million, which was expected to close early into the new year. SaskTel’s CEO Ron Styles noted that Saskatoon Square was not recognized as “core to [SaskTel’s] business”, yet they will remain a tenant of the property.
Not long after, in January 2011, SaskTel announced that an agreement had been reached for the sale of the Hospitality Network (HospNet) to PFM Capital Inc. The sale price of $36.6 million was a bargain for a subsidiary that represented over $150 million in profit for the people of Saskatchewan over the last five years.
Although the sale was attributed to the restrictions of the Sask First Policy, HospNet was a SaskTel subsidiary that provides telephone and television services to hospitals and healthcare facilities in Saskatchewan and across the country. What exactly does the government consider SaskTel’s core business if it is not telephone and television service?
The current government has lead the people of this province to believe that growth of the Crowns will keep them safe, while using backdoor tactics to ensure SaskTel and our other Crown Corporations do not remain profitable and their future growth is limited.
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