December 21, 2016 11:44 pm

Digicel Group banking on investments to lower debt

Global telecommunication company Digicel Group says a cost-cutting plan and growth will reduce company debt and rejected a suggestion its debt was too high. Digicel Group is a Bermuda-based company owned by Irish businessman Mr Denis O’Brien.  It operates in 32 markets in the Caribbean and South Pacific regions.  Digicel commenced its Fiji operations in October […]

Global telecommunication company Digicel Group says a cost-cutting plan and growth will reduce company debt and rejected a suggestion its debt was too high.

Digicel Manager Denis O'Brien at the press conference today at Grand Pacific Hotel (Nacanieli Tuilevuka/Newswire)
Digicel owner Denis O’Brien at a press conference at Grand Pacific Hotel earlier this year  (Photo: Nacanieli Tuilevuka/Newswire).

Digicel Group is a Bermuda-based company owned by Irish businessman Mr Denis O’Brien.  It operates in 32 markets in the Caribbean and South Pacific regions.  Digicel commenced its Fiji operations in October 2008 and has reportedly invested over $115 million since launch.

Mr O’Brien had visited Fiji earlier this year where he finalised the Sky Pacific sale and announced a submarine cable from Samoa to Fiji.

Digicel Group is believed to have a debt burden of $13.7 billion (€6.2 billion), which is 6.2 times its current earnings.

An analyst with US credit research firm CreditSights told a conference in London last week that the company’s cost-cutting plan was ambitious and the company faced “near-term refinancing risks”.

A statement from Digicel Group said that the company rejected CreditSights’ view.

DIGICEL GROUP: “Digicel fundamentally disagrees with the conclusions of the report. Digicel’s outlook remains positive with robust plans to de-lever by monetising our network investment and through realistic cost management initiatives.”

Digicel Fiji CEO, Mr Darren Mclean told Newswire they did not have any further comments to make on this issue.

The company is understood to have told investors in November that it planned to reduce its debt ratio to 4.5 times earnings by the end of March 2019.  The company has also started a cost-cutting plan and hired consultants to help reduce debts.

Digicel Group is optimistic that profits would improve in its next financial year after investing $4.87 billion (€2.2 billion) in its network over the past five years.