Steven Jackson, Business Reporter
The Digicel jet was the only way for Jamaican officials to avoid the embarrassment of missing the funeral of Hugo Chávez, says billionaire and chairman of Digicel Group, Denis O'Brien.
The jet was offered as a gift which subdued some public concerns on cost but raised others concerns about influence.
"It was a very extraordinary situation. They had to get there very quickly and we had the means to get them there. I think it would have been very embarrassing if the prime minister wasn't there. And they couldn't get there (otherwise) because all the flights were full," said O'Brien in a quick interview on Tuesday night at the formal opening of the Digicel headquarters downtown.
The interview, which occurred at the official opening of the Digicel building, also covered the issue of the telecoms' debt load, which O'Brien downplayed, amid disclosure of preliminary plans to invest up to US$2 billion in Myanmar. The licence application will be filed in two weeks.
Members of the Government and Opposition attended the funeral in an attempt to show solidarity with the leader of the oil-rich nation who offered a political opposition to US hegemony. The Government also prizes the PetroCaribe agreement, which staggers oil payments over time.
"It was a very sad occasion when president Chávez died. No one expected him to die and it was all very quick. Obviously, the Government and Opposition had to go there," said O'Brien. "It was just helping the Government and Opposition to go to the funeral ... It was a gift."
Approximately two-thirds of the crude oil imported by Jamaica comes from Venezuela. The discontinuation of the PetroCaribe arrangement could result in an annual increase of US$600 million on Jamaica's balance of payments.
Under the PetroCaribe agreement, which was launched in 2005, Venezuela allows Jamaica and 17 other countries to purchase oil, requiring between five and 50 per cent of the cost upfront. The remainder is paid over a period of between 17 and 25 years under a special financing arrangement that attracts interest at one per cent.
The facility also allows repayment in commodities.
The 10-storey Digicel building on the waterfront in downtown Kingston marks an investment of US$65 million in the crumbling part of the city. It houses the headquarters of both Digicel Jamaica and Digicel Group.
O'Brien said that Digicel invested some US$175 million in Jamaica over the last two years in upgrading the network to 4G. However, the group's main focus relates to its bid for a cell licence in Myanmar.
"We would invest between US$1 billion to US$2 billion," said O'Brien. "We are not really (over-leveraged) because we generate an inordinate amount of cash and we pay down on loans."
Debt has been O'Brien's preferred means of financing expansion of his business. Last year, rating agency Fitch stated that Digicel Group's total debt, at about US$5 billion, was 4.5 times its EBITDA or operating profit. In the same year, Digicel Group grew its operating profit by 13 per cent to US$1.08 billion due to subscriber growth according to yearend financials for March 2012. Revenues for its 30 markets in the Caribbean, Central America and the Pacific, increased 14 per cent to US$2.54 billion and its subscriber base rose 27 per cent to 12.8 million.
"The political reforms in Myanmar are already taking place and the sanctions are lifted. We are one of some 90 companies that have expressed an interest in getting only one or two licences," he said. "We do not know if we will get it, but we have done a lot of work to put in our application."
Digicel will submit its Myanmar application on April 4 and the shortlist will be announced two weeks thereafter, O'Brien said.
O'Brien is the second-richest man in Ireland with a fortune estimated at US$5.2 billion.