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Digicel's New York IPO likely to raise $1.5bn


Digicel owner Denis O'Brien

Digicel owner Denis O'Brien

Digicel owner Denis O'Brien

Denis O'Brien's Digicel is likely to raise $1.5bn in its upcoming initial public offering, the Sunday Independent understands.

An investor roadshow is expected to start shortly.

The company, which provides communications services in the Caribbean and the South Pacific, is in the process of evolving from a pure mobile telecoms company into a "total communications and entertainment provider".

In June, Digicel filed a prospectus with the United States Securities Exchange Commission, announcing an intention to list shares on the New York Stock Exchange.

It intends to use the proceeds for "general corporate purposes, including capital expenditures and acquisitions and to repay existing indebtedness," the prospectus says.

The company's debt was around $6.5bn at the end of March, according to the documents.

"Given that leverage is high, it will be helpful to be able to have equity as an alternative source of funding to debt," Investec fixed income analyst Tammy Lloyd said after the documents were filed. "It's positive and it's going to be interesting to see what it means for the longer-term strategy," she added.

Digicel's strategic plan involves "the expansion of its product offerings through developing its business solutions services and entering the cable TV and broadband businesses, which have lower penetration rates than the mobile business in Digicel's markets," according to the filings.

Digicel is a very strong brand in its core markets, with insiders believing that the brand can be used as an umbrella to cross sell other services to customers.

The company also says it is "focused on improving its competitive position in each of its markets by providing customers with access to better mobile technology, more innovative products, a superior customer experience and better value compared to Digicel's competitors."

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A Digicel spokesman declined to comment on the fundraising reports.

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