Digicel Considers Selling Off Small Assets

Telecoms company Digicel may consider selling some small assets in order to address its highly leveraged position. says founder and chairman Denis O’Brien.

Speaking with Bloomberg Daybreak: Asia from the APEC CEO Summit in Papua New Guinea, O’Brien made it clear that Digicel would not be undergoing a fire sale of its major assets.

When asked whether he would be selling off assets, he responded: “We wouldn’t contemplate that because we have a very homogenic network, but I wouldn’t rule out small sales.

“We monetised towers that we owned in Myanmar and we monetised a financial business as well. Look, we are very flexible.”

Digicel finds itself with a US$6.7-billion debt and is seeking to reduce its highly leveraged position. It is now faced with having to address a US$2-billion bond payment by March 2020 and another US$1-billion payment in 2022.

Digicel wants to extend the maturities on the first note to 2022 and on the second to 2024 at the same interest rate.

The deadline for this swap deal has been pushed back a couple of times as bondholders rejected the terms. Now a new deadline has been set, this time for November 30.

O’Brien said: “We knew this was going to take a long time because you have so many different views from people, and we are trying to find a consensus that we are happy with and that are bondholders are happy with, so it is very consultative and the conversations are going well.”

There has been a lot of attention placed on Digicel’s current position, and its chairman sought to give some insight into its efforts to diversify and move away from an over-reliance on mobile telephony.

“We have spent US$2.3 billion in four years on capital expenditure, diversifying from mobile, building fibre optic networks and building fibre to the home as well as building entertainment assets.

“All of this is good for the future and we are now monetising this and we are seeing growth coming into those new product lines.”

Addressing the topical issue of Brexit, O’Brien observed it was like Dunkirk, but without the boats.

“Britain is looking like an emerging market at the moment, there’s so much chaos. At this stage it’s going to be difficult for the prime minister (Theresa May) to win the parliamentary vote to approve the deal.

“It’s the best of a bad deal really. After May loses the parliamentary vote, there could potentially be a general election and then after that we are into no man’s land.”