Digicel plans to raise up to $2.3 billion in IPO

Digicel Group Ltd. plans to raise as much as $2.3 billion from an initial public offering and listing on the New York Stock Exchange. 

The telecommunications company, owned by Irish billionaire Denis O’Brien, aims to sell 142.8 million Class A common shares for an offering price of $13 to $16, according to its U.S. Securities and Exchange Commission registration statement. 

The regulatory filing said Digicel will use the proceeds of going public to pay down up to $1.3 billion of debt. The company had a total debt of $6.5 billion at the end of June. The remainder of the proceeds is intended to be used for general corporate purposes, such as capital expenditures and acquisitions. 

Digicel owner O’Brien will retain 94 percent of the company’s voting rights through his ownership of the group’s Class B shares, which give 10 voting rights per share compared to Class A shares which are entitled to only one vote each. 

The filing said Digicel has annual revenues of $2.79 billion, a net loss of $157.6 million, adjusted earnings before interest, taxes, depreciation and amortization of $1.18 billion, an operating profit of $707.8 million, and the group held about $500 million in cash or cash equivalent in the year ending March 31. 

Digicel provides mobile communications services to 13.6 million subscribers in 31 markets in the Caribbean and the South Pacific with an aggregate population of approximately 32 million. 

In Cayman, Digicel has a 46 percent mobile market share, the group said in its regulatory filing. 

JPMorgan Chase, UBS Group AG and Citigroup are managing the IPO. 

O’Brien founded Digicel in 2001 in Jamaica, a year after he received a $288 million windfall from selling Esat Telecom Group Plc, the Irish telecommunications company that he built in the 1990s, to London-based BT Group Plc, Bloomberg reported. 

Digicel initially sought growth in small markets where the competition was non-existent, according to Steven Hartley, an analyst in London with research firm Ovum. Now, the company is going up against industry giants, including Carlos Slim’s America Movil SAB and Telefonica SA, while customers are becoming more sophisticated, he told Bloomberg. 

CEO Denis O
CEO Denis O’Brien