BUSINESSMAN DENIS O’Brien is set to gain in excess of €500 million from the proposed sale of Digicel Pacific to its sister company, Digicel Group.
About half the money is expected to be realised in the year after the end of March, with the rest following at a later date. Mr O’Brien is believed to be tax resident in Malta.
Digicel Group, the Caribbean telecom group owned by O’Brien, is expected to acquire more than 51 per cent of Digicel Pacific in the former’s next financial year, which begins on April 1st.
The remainder may be purchased at a later date. Mr O’Brien owns 84 per cent of Digicel Pacific, with third party investors and management owning the rest. The transaction will value the equity in the business at $825 million (€607 million).
Digicel Pacific operates in six markets in the Pacific region and had 1.63 million subscribers at the end of 2009.
Digicel Group operates in 32 markets in the Caribbean, Central America and the Pacific and had 10.75 million subscribers at the end of 2009.
“Over the past 18 months, Digicel Group has evaluated numerous acquisition opportunities to continue its growth, reinforce its business, and capitalise on its management talent and resources,” a spokesman said.
The financing of the transaction is currently being evaluated.
Digicel reported revenue for the nine months to the end of December of $1.3 billion with an EBITDA margin of 43 per cent, up from 40 per cent year on year.
It continues to receive strong support in the capital markets and has successfully refinanced a $450 million bond due in 2012 with a $500 million bond due in 2017.
The Digicel business began with a licence in Jamaica, where the company first began operations in 2001, taking on the then monopoly supplier of mobile phone services there, Cable Wireless.
The group’s growth has included entry into the market in Haiti, where five of it’s 900 staff in that country lost their lives in January’s devastating earthquake.
The earthquake is not expected to have a material financial impact on the group.
No Digicel towers were impacted and network gaps created by the collapse of buildings on the rooftops of which sites were located, has almost all been filled with “cells on wheels”.
In the wake of the earthquake Digicel committed to a donation of $5 million and has since then raised more than $800,000 in relief funds.
