Digicel calls off €1.8bn flotation on New York stock market
Digicel, the telecoms group owned by billionaire Denis O'Brien, last night cancelled a planned stock market debut in New York that could have valued the business at as much as $10bn (€9bn).
It was widely expected that the shares would begin trading on the New York Stock Exchange on Friday.
Digicel, which has its headquarters in Bermuda and which was founded by Mr O'Brien in 2000, had been expected to raise proceeds of between $1.8bn to $2bn (€1.6bn and €1.8bn) from the highly anticipated share sale.
It would have been the second-biggest stock market flotation in the United States this year.
Digicel said that despite significant support for the initial public offering (IPO) 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, who is chairman of the group, said in a statement last night: "Given our growth outlook, an IPO for Digicel was optional and predicated on achieving fair value for the company.
"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."
Mr O'Brien said that Digicel would continue to exploit strong business opportunities.
There were five stock market flotations on Wall Street last week and in all of them the shares offered to the public were sold at below the expected range. Seven healthcare firms were due to make their market debuts in the United States last week, and three of those flotations were pulled.
Mr O'Brien was not in line to receive any of the proceeds from the Digicel share sale, and would still have retained control of the business following the flotation.
It is likely Digicel would have sold 124 million shares, which would have represented about 39pc of the company's equity.
Last month, Digicel 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 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 and an operating profit of just under $708m (€636m). It also recorded a net loss of $157.6m (€141.7m) in the same period.
In the three months to the end of June, revenue totalled $760m and it made an operating profit of $165m. Its net loss in the period was $31.4m.
Last week, the company agreed to sell its 75pc stake in a telecoms infrastructure company in Myanmar.
Digicel will book a $60m (€53m) gain from the sale on net proceeds of $120m.