Wed | Feb 26, 2020

Digicel not for sale but IPO still possible

Published:Friday | February 24, 2017 | 12:00 AMNeville Graham

Digicel Group, on Wednesday, said definitively the company was not positioning itself for sale amid a shake-up of the operation that affects its worldwide markets.

"No," said head of group public relations Antonia Graham, when asked directly if the announcement of the 2030 programme would result in a sale of the telecoms.

But she also said Digicel was not ruling out the possibility of another try at a float of its shares via an initial public offering (IPO).

"Digicel is one of the first communications and entertainment providers in the world to initiate a wide-scale transformation agenda. We are building Digicel for 2030 and beyond. Our transformation programme sees us taking the bull by the horns and daring to be different, by challenging the status quo and by innovation-led growth," Graham said.

Digicel Group operates in more than 30 markets, an operation built out by founder Denis O'Brien in one and a half decades using debt financing.

Previous IPO attempt

O'Brien made a try at floating the company in New York but pulled the plans based on a cool reception to the price he wanted for the shares. Some of the IPO proceeds were meant to retire debt.

A filing in August 2016 showed that Digicel had assets of US$$4.6 billion, and debts of US$7.6 billion.

Stockholders' equity amounted to US$3 billion.

"We have no immediate plans for an IPO, but we have not ruled it out in the medium term," said Graham.

She was otherwise mum on the specifics of the 2030 plan, including what it would cost to execute and what the company would save.

The company aims to cut 25 per cent of its global workforce, which is expected to impact around 1,500 to 1,600 staff, based on estimates of a 6,500 workforce. The cuts begin March 1.

"The first step will be the offer of an Enhanced Voluntary Separation Programme with a generous package on offer," said Graham.

The restructuring will see Digicel operating out of four hubs to service 31 markets. Two will serve the Caribbean and Central America region (CAC) and another two will serve the Pacific markets. The CAC markets are divided into anglophone, francophone and Spanish-speaking subregions. Graham would not be drawn on where exactly the regional hubs will be located.

"We will announce the locations at a later date," she said.

The hubs will be "housing back-office, centralised functions and delivering shared services, allowing the staff in Digicel's 31 markets to focus on sales and enhanced service delivery and ensuring that resources and investment are prioritised to drive competition and innovation," according to the release issued by the company on Wednesday.

Digicel has poured US$1.65 billion into upgrades over the last three years.