O’Brien’s Digicel raises US$408m in funding pact

7 Mar 2005

Denis O’Brien’s Caribbean-based mobile phone company Digicel has completed a US$408m syndicated funding agreement led by Citigroup in New York.

The funding provides capital enlargement for Digicel and for the rapid acceleration of the company’s aggressive expansion strategy in the Caribbean. The funding agreement includes US$120m in new debt capital to fund its growth and acquisition strategy. The company has also streamlined its corporate structure, including restructuring debt and completing the buyout of minority equity holders including the International Finance Corporation through a bond offering partially tied to the Jamaican, Trinidad and Tobago capital markets.

Banks involved in the new funding include Nordea Bank AB, Export Development Canada, Allied Irish Bank, Bank of Ireland, Deutsche Bank AG, Bank of NT Butterfield & Son, Trinidad and Tobago Unit Trust Corporation, the Bank of Nova Scotia, National Commercial Bank and FMO Financierings-Maatschappij voor Ontwikkelingslanden NV. Digicel was also advised by Connolly Corporate Finance and Island Capital.

Digicel operates in seven countries, including Aruba, Barbados, The Cayman Islands, Grenada, Jamaica, St Lucia, St Vincent and the Grenadines, and is one of the largest GSM mobile operator in the region with an average market share of 60pc. The company is currently planning to extend its footprint into other Caribbean countries and is currently one of five operators involved in a telecom license selection process in Trinidad and Tobago.

Digicel, with a current workforce of more than 1,000, has enjoyed rapid growth by aggressively winning significant market share in every market it has entered. The company’s customer base grew 33pc in 2004 and was recently ranked No 1 in customer satisfaction in Jamaica.

Commenting on the funding, O’Brien said: “We are now strategically positioned to move to the next phase of our expansion.”

Julie Siskind, Citigroup’s senior transactor for the financing, commented: “This transaction provides Digicel with a financial profile that allows it to invest further in its existing operations as well as execute on further expansion plans throughout the region.

“The transaction was very well received by both international and regional investors in recognition of Digicel’s impressive performance to date in the Caribbean region,” said Siskind.

By John Kennedy