Digicel makes plans for New York market listing
Published 27/06/2015 | 02:30
Digicel, the telecoms giant owned by businessman Denis O'Brien, is to list on the New York Stock Exchange.
The company filed paperwork with US regulators yesterday which kicks of the process for an initial public offering (IPO). Assuming that all goes according to plan, the shares will likely begin trading later this year.
The move sets the scene for the highest profile listing by an Irish-led company for years.
Digicel's business is focused on the Caribbean, where it has almost 11 million customers and in the South Pacific, where it has just under three million subscribers.
In a filing with US regulators, Digicel said it plans to raise $200m (€179m) with the listing. That however is considered only a nominal figure at this point and is likely to change before the IPO takes place.
The firm added that the proceeds from the sale will be used "for general corporate purposes, including capital expenditures and acquisitions and to repay existing indebtedness".
"We do not expect that any proceeds will be used to fund dividends to common shareholders," Digicel added.
The shares will trade under the ticker "DCEL" on the New York Stock Exchange.
The decision to float Digicel has been long anticipated. The company has traditionally funded itself through the bond markets but industry watchers had expected the telecoms firm to go public eventually.
Investec's Tammy Lloyd said the IPO was positive for the company.
"Given that leverage is high, it will be helpful to be able to have equity as an alternative source of funding to debt," she said.
The "F-1" filing lays out Digicel's position at present and its future plans. The company made a net loss of $157.6m in the year to the end of March 2015, on revenue of $2.8bn.
It also highlights the company's plans for the future. In a sign of the growth of smartphones among its subscribers: a third of customers were using smartphones at the end of March this year, more than double the rate in 2013.
Echoing strategies used in other more developed markets, Digicel says it is "in the process of evolving from a pure mobile telecommunications company into a leading total communications and entertainment provider".
As part of that plan, which sets the company on the road to developing a so-called "triple play" business, it is entering the cable television and broadband sectors. It is doing this through a series of acquisitions.
Digicel will have a dual class share structure. Only Class A shares will be offered for sale as part of the IPO. These carry one vote per share. Class B shares however, which are not being offered for sale, will carry 10 votes per share.
As a result, Mr O'Brien will continue to have voting control as long as he owns Class B shares representing at least 10pc of Digicel. If Mr O'Brien does decide to sell some of his Class B shares, they will immediately convert to Class A shares for whoever buys them. Mr O'Brien is also a shareholder in Independent News & Media.
Digicel, which is led by chief executive Colm Delves, has hired Ken McGrath as CEO for Carribean and Central America. He is a former head of Lidl in the US and Ireland.
Despite the company's strong Irish connections, it is not expected to list on the Irish Stock Exchange in the near future.