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Digicel Plans IPO to Fuel Growth

Operator owned by Ireland's Denis O'Brien says proceeds will be used for expansion activities and paying off debts.

Iain Morris

June 29, 2015

2 Min Read
Digicel Plans IPO to Fuel Growth

Caribbean telecom operator Digicel is planning to raise funds through an initial public offering of shares in New York.

In a filing with the US Securities and Exchange Commission, the company -- which is owned by Irish billionaire Denis O'Brien -- said it would use the proceeds for acquisitions and capital expenditure, as well as to pay off existing debts.

The filing provided only limited details about Digicel Group 's plans but did indicate it would raise equity, nominally set with an aggregate maximum value of $200 million, through the sale of Class A shares, which will entitle holders to one vote per share.

The operator's Class B shares, all of which are currently in the hands of Denis O'Brien, come with ten votes per share.

The IPO documentation also reveals that O'Brien will be able to continue exercising control over matters requiring shareholder approval as long as he holds a stake of at least 10% in Class B shares.

"This concentration of ownership and voting power may also delay, defer or even prevent an acquisition by a third-party or other change of control of the company and may make some transactions more difficult or impossible without the support of Mr O'Brien, even if such events are in the best interests of other shareholders," noted Digicel in the filing.

Digicel provides a range of telecom services in the Caribbean and South Pacific regions and now claims to serve about 13.6 million customers across 31 countries.

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Although it remains the biggest player in most of its markets, Digicel has recently faced competition from the likes of América Móvil S.A. de C.V. and Telefónica and blamed pricing pressure and adverse regulation for some disappointing financial results.

The operator reported revenues of $2.8 billion in the financial year to March 2015, an increase of 1.5% on the previous year's figure, but swung to a net loss of $157.6 million from a net profit of $43.5 million over the same period due to rising costs.

Digicel has been investing heavily in the rollout of high-speed fixed and mobile networks and says it now offers 3G or 4G services in 30 of its 31 markets.

It is also deploying fiber-to-the-home networks in Jamaica, Trinidad and Tobago and Barbados.

Overall debts had risen to $6.5 billion in March 2015, from $6.1 billion a year earlier, representing about 5.5 times the operator's earnings before interest, tax, depreciation and amortization.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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