KeyTech Limited Comments On ATN Transaction

July 21, 2016

In a filing with the Bermuda Stock Exchange [BSX], KeyTech Limited, provided information on the accounting for the recently concluded transaction with ATN International, Inc.

The filing stated “KeyTech Limited refers to the transaction in which ATN International, Inc. [ATN] purchased a majority interest in the Company in exchange for ATN’s ownership interests in Bermuda Digital Communications Ltd. [CellOne] and approximately $42 million in cash, resulting in the Company becoming the sole owner of CellOne [the “May 2016 Transaction”].

“The Company is aware of a recent filing made by ATN to the U.S. Securities and Exchange Commission [the SEC] in respect of the May 2016 Transaction and believes it prudent to make a public statement in respect of the information contained in the filings to ensure its shareholders and the public are fully apprised of the relevance of the information as it pertains to the Company.

“ATN and the Company are standalone entities following different accounting standards and subject to the laws of their respective jurisdictions. ATN is subject to U.S. securities laws and U.S. Generally Accepted Accounting Principles [U.S. GAAP].

“In contrast, the Company is subject to the laws of Bermuda, is listed on the Bermuda Stock Exchange [the BSX] and follows International Financial Reporting Standards [IFRS] rather than U.S. GAAP.

“ATN’s SEC filing, reporting the pro forma financial statements consolidating the Company in accordance with U.S. GAAP, references an impairment to the underlying value of the Company’s assets in the amount of approximately $80 million, predominately related to write-down of goodwill and other intangible assets.

“The Company wishes to caution its shareholders and the public that the technical accounting treatment of the May 2016 Transaction as filed with the SEC may differ with the Company’s own audited accounts under IFRS.

“It should be further noted that under U.S. GAAP, these financial statements do not include any gain that the Company expects to realize under IFRS rules as a result of its consolidation of CellOne ownership interests.

“In keeping with allowable time periods, the Company anticipates completing its audit and the provision of its own required annual financial disclosures to shareholders for the period ended March 31, 2016 on or around August 31, 2016.

“While the Company cannot accurately predict the amount of such impairment at this stage in its audit, it is currently of the view that some amount of impairment will be recorded in its March 2016 audited financial statements in accordance with IFRS, as a result of the May 2016 Transaction.

“The corresponding gain under IFRS from the consolidation of CellOne is expected to be recorded in subsequent financial statements for the period following the transaction date.

“The Company reiterates that the details of the May 2016 Transaction previously communicated to shareholders at a special general meeting of the Company and in its related BSX filings and communications remain the same.

“The Company has been, and continues to be, in compliance with applicable laws and accounting standards in Bermuda with respect to the May 2016 Transaction, and looks forward to further clarifying these matters with its shareholders in its upcoming Annual General Meeting.

“A notice of the date of the Annual General Meeting will be provided to shareholders of record following scheduling of the meeting, as required by BSX Regulations and Bermuda law.”

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