Digicel funds sister company buy-out with $775m bond sale
Published 18/03/2010 | 05:00
TELECOMS billionaire Denis O'Brien stands to make around $650m (€472m) after the Digicel Group sold bonds yesterday to pay for the acquisition of a sister company that operates in the south Pacific.
Jamaica-based Digicel sold $775m worth of 10.5pc senior notes due 2018 in a private placement to part-fund the purchase of Digicel Pacific for $825m.
The bonds were priced at par to yield 715 basis points more than similar-maturity Treasuries and were rated Caa1 by Moody's and CCC+ by S&P. The sale of Digicel Pacific to its Caribbean parent will generate the huge windfall for Mr O'Brien, who holds an 84pc stake in the company, which operates in six countries.
The rest of Digicel Pacific is owned by management and private investors. Sources said the bond sale was over-subscribed.
Mr O'Brien will, nonetheless, reinvest €200m from his personal fortune by buying some of the bonds on his own account.
The businessman created Digicel Pacific four years ago, and it has 1.63 million subscribers today.
It operates in Samoa, Papua New Guinea, Tonga, Vanuatu, Fiji and Nauru.
Digicel Pacific grew its subscriber base by 61pc last year to 1.63 million and it has positive cash flow.