Digicel to raise US$865 million in private placement
THE Digicel Group intends to raise US$865 million ($94.3 b) in a private placement for financing and working capital purposes, the company indicated.
Its the latest bond issue from the telecom company headquartered in Ireland seeking to branch out into Burma, otherwise known as Myanmar.
"Digicel intends to use the net proceeds from this offering to repurchase any and all of Digicel's 10.50 per cent senior notes due 2018 in a concurrent tender offer and the related consent solicitation, pay any related fees and expenses, including applicable tender premiums and accrued interest on the 10.50 per cent senior notes, and redeem the 10.50 per cent senior notes, if any, that remain outstanding after the completion of the tender offer and use any remaining net proceeds for general corporate purposes, which could include capital expenditures, investments, acquisitions or debt repayment," stated Digicel in a statement obtained by Caribbean Business Report.
Antonia Graham head of group communications told Caribbean Business Report that the bond was issued on Wednesday.
"As such, I am not able to provide any further comment at this point," she added.
Digicel will again avoid raising funds in the US which will apparently require the disclosure of financials for the private company incorporated in Bermuda and owned by Irish investor Denis O'Brien. Digicel, which operates in 30 markets throughout the Caribbean, El Salvador and the South Pacific.
The group in December issued US$500 million of the existing 8.25 per cent DGL senior notes due 2020, which brought the total amount outstanding of the DGL 2020 notes to US$2 billion, financials stated.
Will use funds to finance further expansion
US-based rating agency Moody's explained that Digicel would probably use US$500-million bond proceeds to finance its joint venture in Myanmar. The venture entails constructing and leasing up to 1,250 wireless towers in Myanmar with Ooredoo QSC as the anchor tenant. Ooredoo, a Qatar-based telecommunications carrier, was awarded one of two licences in July 2013 to provide mobile communications services in Myanmar. At the time, Moody's affirmed Digicel with a stable B2 in December 2013.
Earnings and subscribers on the rise
The Digicel group earned US$36.9 million ($3.9 billion) net profit over three months ending December 2013 which reversed the loss in the prior year's quarter, financials indicated. Over nine-months net profit totalled US$61 million which reversed a whooping US$215-million loss in the comparative period the year before. Haiti remained the top territory, followed by Papua New Guinea which surpassed Jamaica over the quarter, financials indicate.
The group earned US$305 million before interest, tax, depreciation and amortisation (EBITDA) for the quarter, which represents an EBITDA margin of 46 per cent of service revenues, an increase of one percentage point from the prior year period.
Subscribers increased by five per cent from 12.8 million subscribers at December 31, 2012 to 13.4 million subscribers at December 31, 2013, financials indicated. Digicel Group's cash on hand at December 2013 amounted to US$1.5 billion.