Digicel flotation to raise hundreds of millions of dollars

Businessman Denis O’Brien is to float his mobile phone business Digicel on the New York Stock Exchange in three to four months time, raising hundreds of millions of dollars.

Digicel lodged a form with the US financial regulator, the Securities and Exchange Commission (SEC), yesterday formally announcing its intention to offer shares in the company for sale on the New York market.

While the 300-plus page document states that the flotation aims to raise $200 million, this is simply a holding figure, and the final amount is likely to be multiples of this.

A statement issued at the same time said the number of shares and the price range for the proposed offering have yet to be determined.

The form indicates that Mr O’Brien will not benefit directly from his company’s stock exchange launch.

Major cash cow

The company has been a major cash cow for the Irish businessman, with the document lodged yesterday showing that he received $1.1 billion in dividends in the past three financial years.

He receives a regular dividend of $40 million a year from the company, comprising $10 million a quarter. In addition, Mr O’Brien was given a special dividend of $650 million in the year to the end of March 2014 and a similar payment of $300 million in the previous 12-month period.

Digicel operates mobile phone networks in 31 countries across the Caribbean, Central America and south Pacific. Revenues in its last financial year, which ended on March 31st, were $2.8 billion. Mr O’Brien owns 100 per cent of Digicel. The company will issue new shares before listing them on the New York market.

While this will dilute the businessman’s holding in Digicel, the flotation document indicates that he will keep control of the business.