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May 29, 2024
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Private Equity

Private equity takeover of Digicel by month’s end | Business


Digicel Group and its affiliates issued legal documents showing that the change of majority ownership is to be completed before month-end.

Founder Denis O’Brien and other directors were given the documents to sign on Thursday in Dublin, Ireland. The estimated timeline for the completion of the overall transaction is “approximately” Friday, January 26.

The document was one of a series of new filings to the US Securities and Exchange Commission this month regarding the debt-conversion scheme ,which will see O’Brien giving up majority ownership and control of the telecoms that began in Jamaica and has its operational headquarters in Kingston.

It will result in nearly two-thirds of the voting rights in Digicel ending up in the hands of two investment managers. PGIM Inc will hold 48.4 per cent and Contrarian Capital 16.2 per cent, the new documents indicate. A third private equity fund, GoldenTree Asset Management, will also hold an unknown stake.

O’Brien will remain a minority owner, but his reduced stake after the transaction closes also was not disclosed.

PGIM is led by principal Gregory Cass, GoldenTree by partner Pat Dyson, and Contrarian Capital Management by Managing Director Xiao Song.

The debt-conversion transaction will reduce Digicel’s borrowings to around US$3 billion from US$4.7 billion.

The precise holdings of O’Brien following the completion of the transaction was not disclosed. He is being replaced as chairman by Rajeev Suri, but the new filings made no reference to that previously announced transition.

Digicel started in Jamaica in 2001 and expanded throughout the Caribbean, as well as to Central Americia and the Pacific, using mainly debt to build out its operations. Some US$5 billion of investment was poured into the telecoms network over time.

It was a start-up that successfully competed against the established Cable & Wireless. Digicel’s debt load eventually spiralled out of control, and its struggles to meet payments on its bonds eventually led to the restructuring by its creditors.

steven.jackson@gleanerjm.com



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