Wednesday 18 September 2019

Digicel completes third towers sale and leaseback deal

Digicel founder Denis O'Brien
Digicel founder Denis O'Brien
Donal O'Donovan

Donal O'Donovan

Digicel has raised in the region of $90m (€77m) from a sale and leaseback of 451 telecoms towers in Jamaica, the latest in a series of transactions to reduce its overall debt burden.

A separate Digicel sale, of 309 towers in the Pacific, is set to raise an additional $55m, and remains on course to close later this year, sources said.

The Jamaica sale and leaseback agreement has been struck with US-based Phoenix Tower International (PTI), through its Jamaican subsidiary, Phoenix Tower Jamaica Limited.

It's the third transactions involving both parties in the past two years. Digicel sold 215 wireless-communications towers in the French West Indies to PTI earlier this year, and 202 towers in El Salvador to the same buyer in 2017.

The price on the latest deal is in line with recent guidance, and more than the initial expectation for $80m.

Regulatory approvals and licences have been sought and granted for the deal, that will see PTI assume ownership and management rights to the 451 wireless communication tower sites in Jamaica.

Digicel told investors earlier this year that it plans to reduce its debt burden by "one-turn" - a multiple of borrowings to earnings - to 5.7 times earnings from 6.7 times, by next year, largely through growth but also by selling assets.

Progress on that will boost its ability to negotiate a debt refinancing deal with bondholders. Digicel is seeking agreement, by October 19, from a group of bondholders for the company's proposal to swap $3bn (€2.59bn) of debt for new securities with later maturity dates.

The offer acceptance deadline has been pushed out amid resistance for lenders, who are expected to lobby for better terms on the new financing package.

Denis O'Brien-owned Digicel developed as a mobile phone provider and now provides telecoms, communications and entertainment services in 31 markets in the Caribbean, Central America and Asia-Pacific regions.

Irish Independent

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