Monday 24 October 2016

Digicel cancels planned stockmarket debut in New York

The company owned by Denis O'Brien had been expected to raise between $1.8bn to $2bn (€1.6bn and €1.8bn) from the highly anticipated share sale

Published 06/10/2015 | 21:50

Denis O'Brien, founder and chairman of Digicel
Denis O'Brien, founder and chairman of Digicel

Digicel, the telecoms group owned by billionaire Denis O’Brien, has just cancelled a planned stockmarket debut in New York that could have valued the business at as much as $10bn (€9bn).

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It was widely expected that the shares would begin trading on the New York Stock Exchange tomorrow.

Digicel, which was founded by Mr O’Brien in 2000, this evening said that despite significant support for the flotation from a high quality group of investors during the marketing period, “current conditions, particularly in emerging markets, have impacted transaction momentum over recent days”.

Mr O’Brien is chairman of the group.

“Given our growth outlook, an IPO (Initial Public Offering) for Digicel was optional and predicated on achieving fair value for the company,” said Mr O’Brien in a statement this evening.” Recent volatility in equity markets has seen a number of IPOs listing at a discount to their signalled price range and this was a less attractive route for us.”

He added: “Digicel is now at a key juncture in our growth story following a $1.5bn investment programme over the past three years; we generate strong and growing free cash flow and we have no material debt maturities until 2021.”

“Our growth plans remain unchanged and we remain in a strong position to exploit areas of interest in: data, business solutions, cable TV and broadband.”

Bermuda-headquartered Digicel had been expected to raise between $1.8bn to $2bn (€1.6bn and €1.8bn) from the highly anticipated share sale.

Mr O’Brien wasn’t in line to receive any of the proceeds from the share sale, and would still have retained control of the business following the flotation.

Last month, the company told the US Securities and Exchange Commission that it planned to sell its shares at between $13 and $16 apiece.

Digicel – whose operations stretch around the Caribbean, to Central America and across the Pacific – intended to use between $1.2bn and $1.3bn of the initial public offering (IPO) proceeds to cut its $6.5bn in gross debt.

The remaining proceeds were to be earmarked for capital expenditure and acquisitions, as well as general corporate purposes.

The IPO plans were being handled by UBS, Credit Suisse, JP Morgan, Barclays, Citigroup and Deutsche Bank, with Irish stockbroking firm Davy acting as the lead manager.

Digicel generated revenue of $2.8bn (€2.5bn) in its last financial year, an operating profit of just under $708m (€636m), and a net loss of $157.6m (€141.7m).

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