Digicel to launch IPO on Wall Street

Saturday, June 27, 2015

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TELECOMMS giant Digicel Group Limited, which is based in Kingston, will be launching an initial public offering (IPO) on the New York Stock Exchange from which it expects to raise $200 million.

The company announced that it has publicly filed a registration statement on Form F-1 with the US Securities and Exchange Commission (SEC) relating to a proposed initial public offering of its Class A common shares under the ticker symbol "DCEL." The number of shares to be offered and the price range for the proposed offering have not been determined. The offering will be made by means of a prospectus.

Digicel, currently owned by Irish billionaire Dennis O'Brien, intends to "use the net proceeds of the offering for general corporate purposes, including capital expenditures and acquisitions, and to repay existing indebtedness," according to a release published by the company. Digicel says it does not expect that any proceeds will be used to fund dividends to common shareholders.

JP Morgan Securities LLC, UBS Securities LLC and Citigroup Global Markets Inc will act as joint book-running managers of the offering. Barclays Capital Inc and Credit Suisse Securities (USA) LLC will act as bookrunners.

Number portability

The announcement comes at a time when Digicel and LIME/Flow are fighting locally to win each other's customers as number portablity opens up. So far, Nearly 100 subscribers per day have sought to be ported to the LIME network, according to a LIME news release on Friday, which also stated that 10 LIME customers had been switching to Digicel in comparison.

"In total, at the end of the first week of LNP, LIME gained close to 700 new subscribers against Digicel gaining just over 50." LIME said.

But Digicel claimed to be satisfied with its results so far.

"We are happy that number portability is here and that it is working very well. As expected, we have had a lot of positive requests from both consumers and corporate customers, and we look forward to welcoming them to Jamaica's bigger family so they too can enjoy the benefits and value that only Digicel can deliver," said Sean Latty, COO of Digicel Jamaica.

"We have been getting very positive response from customers on the offers that we've had in the market over the past few days and we expect this to continue into the weekend," he said.

Digicel started in Jamaica, but has been performing in a saturated market locally. Earlier this month, Digicel Group's growth in Jamaica for 2015 was described as weak by USbased Fitch Ratings. Meanwhile, the company sees strong growth in Papua New Guinea (PNG). "Papua New Guinea continues to grow strongly, offsetting weak growth in other major countries of operation, such as Jamaica and Haiti," said Fitch. The report comes as Fitch affirmed a 'B' rating for the Digicel Group and its subsidiaries, with a stable outlook. Digicel pointed out its commitment to growing the 4G sector in its response to the Fitch report.

Digicel Group Limited is a leading provider of communications services in 31 markets in the Caribbean and South Pacific regions, where the company provides a comprehensive range of mobile communications, business solutions, cable tv and broadband and other related products and services to retail, corporate (including small- and medium-sized enterprises) and government customers.

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