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Columbus scores US$1.25b - Bond offer six times oversubscribed

Published:Wednesday | April 9, 2014 | 12:00 AM
Brendan Paddick, chairman and CEO of Columbus Communi-cations, the parent company for Flow Jamaica. - File

 Avia Collinder, Business Reporter

Columbus International Inc, the company that owns triple-play company Flow, has successfully raised US$1.25 billion of capital on the bond market, about a quarter of which will finance expansion plans across its markets.

The company attracted offers that were six times its targeted fundraising.

Columbus says the majority of the funds will refinance US$852 million of existing debt, while US$100 million may be paid out to shareholders.

The company said it is still mulling whether to pay the dividend.

Columbus was founded in 2005 by Brendan Paddick, John Risley and Michael Lee-Chin. A fourth equity partner, John Malone, was added in January 2013. Risley remains the largest and controlling shareholder.

The company entered the Jamaican market under the name of Columbus Communications Jamaica, trading as Flow Jamaica. It initially grew by acquisition by snapping up several cable rivals, and is now looking to compete on customer service.

Flow says it has achieved 50 per cent market share in the triple-play cable, Internet and landline service market to households in Jamaica and is now in a position to expand.

Paddick, Columbus International's CEO, told Wednesday Business that the bond proceeds will be used "to invest back in the region" across all eight Caribbean markets and in the operating territories in Latin America.

After the debt refinancing, fees, and dividend payment, less than US$300 million - the equivalent of about J$33 billion - is left for capex programmes.


"For the Caribbean, and Jamaica, specifically, we are currently focusing on enhancing all of our customer touch points as part of our five-year plan to become 'best customer service organisation' in the region, as well as several staff development initiatives to meet our other primary goal - to be the 'employer of choice' in the region," Paddick said via email.

Neither Paddick nor the Flow Jamaica office specified how much of the funds were earmarked for spending in Jamaica.

The bond offer, which closed on March 31, was said to be six times oversubscribed. Offers came close to US$8 billion from some 300 investors, Columbus said.

The US$1.25 billion of senior unsecured notes were issued at a coupon rate of 7.375 per cent and will mature in 2021.

The refinancing effectively cuts more than six points off Columbus' bond repayments.

Part proceeds have been used to retire US$640 million of senior secured 11.5 per cent notes issued by Columbus in 2009, as well as its US$212-million senior unsecured 9.5 per cent notes, the company stated.

"The balance of the net proceeds may be applied to pay up to US$100 million in dividends and for general corporate purposes, including the funding of an acquisition previously announced," the company said.

The transaction was led by Citigroup, JPMorgan and RBC Capital Markets.

One year ago, Columbus completed acquisition of Kelcom International Limited and some of its related companies, which operate under the name Karib Cable.

Karib provides cable services to St Lucia, St Vincent & the Grenadines, and Antigua. Kelcom also holds telecommunication licences in Barbados.

With the completion of that transaction, Columbus said its retail operations now span eight countries across the region, more than 750,000 households and businesses, and that it serves in excess of 550,000 retail customers.

The company operates in 25 territories in Latin America and the Caribbean and lays claim to a residential and corporate client base of well over 650,000 customers in total.

Commenting on market share in Jamaica, Paddick said Tuesday: "We do not have definitive figures, but we reach approximately 50 per cent of households across Jamaica for cable, Internet and landline services."