Caribbean-focused telco Digicel has called off its planned IPO, blaming the weak stock market conditions that have forced others to list at a discount.
Caribbean-focused telco Digicel has called off its planned IPO, blaming the weak stock market conditions that have forced others to list at a discount.
The company said in a statement just three days before its shares were scheduled to begin trading on the New York Stock Exchange that the current economic environment, particularly in emerging markets, had impacted the transaction’s momentum in recent days.
It was keen to stress, however, that the IPO attracted “significant support” from a high-quality group of investors during the marketing phase.
Digicel founder and chairman Denis O’Brien (pictured) said an IPO was predicated on achieving “fair value” for the company. The fact numerous recent listings have priced at a discount to their initial price ranges made it “a less attractive route”, he said.
“Digicel is now at a key juncture in its growth story following a US$1.5bn investment programme over the past three years; we generate strong and growing free cash flow and we have no material debt maturities until 2021,” O’Brien said.
“Our growth plans remain unchanged and we remain in a strong position to exploit areas of interest in data, business solutions, cable TV and broadband.”
In late September, Digicel said it would offer 124.1 million shares in the offering at US$13-US$16 each, plus another 18.6 million shares in a greenshoe, aiming to raise up to US$2.28bn in total. The company said it planned to spend some US$1.3bn of the proceeds on tackling its US$6.5b debt pile. A portion of the proceeds was also expected to be set aside for acquisitions.
JP Morgan, UBS and Citigroup were preparing the IPO alongside joint bookrunners Barclays, Credit Suisse and Deutsche Bank, and Davy as lead manager.
Digicel serves 13.6 million mobile subscribers in 31 markets across the Caribbean and South Pacific. It claims to be the number one player in 21 of those markets, and says it has a market share of over 50% in 20 markets. The company now provides cable TV and broadband services to residential customers in nine markets, and is in the process of rolling out FTTH in Jamaica, Trinidad & Tobago and Barbados.