Denis O’Brien’s Digicel abandons €1.8bn IPO plans

7 Oct 2015

Digicel has abandoned its plans for an IPO on the New York Stock Exchange, citing recent volatility in equity markets.

The telecoms company headed by billionaire Denis O’Brien had planned to float on the New York Stock Exchange in a move that could have raised US$1.8bn, valuing the company at over US$10bn.

The Bermuda-headquartered company provides mobile communications services to 13.6m subscribers in 31 markets across the Caribbean and South Pacific regions. This includes more than 11m in the Caribbean and more than 3m in the South Pacific.

O’Brien said weak market conditions were a deciding factor.

“Given our growth outlook, an IPO for Digicel was optional and predicated on achieving fair value for the company,” O’Brien said.

“Recent volatility in equity markets has seen a number of IPOs listing at a discount to their signalled price range and this was a less attractive route for us.”

A big risk for Digicel

The decision has to be a disappointment for the group and investors, and would have been one of the outstanding Irish business stories of the year.

However, it can’t have been an easy decision to make and the risk would have been significant.

“Digicel is now at a key juncture in our growth story following a US$1.5bn investment programme over the past three years; we generate strong and growing free cash flow and we have no material debt maturities until 2021,” O’Brien said.

“Our growth plans remain unchanged and we remain in a strong position to exploit areas of interest in data, business solutions, cable TV and broadband.”

New York Stock Exchange image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years