Digicel likely to double money from bond drive
DIGICEL, THE Caribbean telecoms group owned by billionaire Denis O’Brien, looks set to double the amount of money it is raising through a bond refinancing drive to $1.4 billion (€1 billion).
Last week it was reported that Bermuda-registered Digicel Group Ltd (DGL) planned to launch a private placement of $700 million of senior notes that would be due in 2020. However, it has now emerged that the company looks set to double the amount.
In a statement issued on Friday, the company said it had amended its previously announced cash tender offer.
It said it had eliminated the maximum tender amount that applied to the offer and was now offering to purchase any and all of the outstanding senior notes.
The amounts outstanding for the senior “toggle” notes and senior notes, according to the statement, are $415 million and $1 billion respectively.
Last week the ratings agency Moody’s noted that while Digicel continues to have strong diversification across the Caribbean and Pacific islands, this was mitigated by its exposure to Jamaica (19 per cent of total revenue), which is struggling to revive its economy and is experiencing competitive telecom pricing.
Digicel’s earnings before interest, tax, depreciation and amortisation (Ebitda) for the year ending March 2012 was $1.08 billion.
Moody’s said it was forecasting the company to end the year to the end of March 2013 with about $550 million in balance-sheet cash.
“Moody’s expects Digicel to generate solid free cash flow of about $100 million (before special dividends) in full year 2013, as Papua New Guinea and Haiti contribute healthy cash flows.”
It said given the incremental debt taken on by Digicel, the stable outlook reflected its opinion that despite continuing subscriber and cash flow growth, DGL was unlikely to drive its debt-to-Ebitda leverage to below four times over the ratings horizon.
Digicel is the largest provider of wireless telecoms in the Caribbean. Revenue for the 12 months ended June 30th, 2012, was $2.3 billion.