O'Brien's Digicel Plans to Raise as Much as $2.3 Billion in IPO

  • Digicel plans to repay $1.2 billion to $1.3 Billion of debt
  • O'Brien to control about 94 percent of voting rights after IPO

Digicel Group Ltd., the mobile-services company owned by Irish billionaire Denis O’Brien, plans to raise as much as $2 billion from an initial public offering, in what could be the second-biggest U.S. IPO this year.

The telecommunications company, which does business in the Caribbean and South Pacific, aims to offer 124.1 million of Class A common shares at between $13 and $16 each, according to a regulatory filing on Tuesday. The IPO size could climb to $2.3 billion if banks underwriting the deal exercise their option to buy an additional 18.6 million shares.

Digicel’s offering would be outsized by payments company First Data Corp., the KKR & Co.-owned company that’s seeking an IPO of at least $2.5 billion as soon as this month, people familiar with the matter have said.

Repay Debt

Digicel, which is set to list on the New York Stock Exchange, plans to use the proceeds to repay as much as $1.3 billion of debt, it said. O’Brien will be able to exercise voting rights over about 94 percent of the company through his Class B shares after the IPO, according to the statement.

Digicel isn’t O’Brien’s first foray into the telephone industry: The company was founded in 2001 in Jamaica after he received $288 million from selling Esat Telecom Group Plc, the Irish telecommunications company that he built two decades ago, to London-based BT Group Plc.

Now, Bermuda-based Digicel operates in 31 markets. For the year through March, Digicel reported adjusted earnings before interest, taxes, depreciation and amortization of $1.18 billion, on revenue of $2.79 billion, according to company filings.

In June, Digicel filed to sell shares in the U.S. and said it would list them on the New York Stock Exchange. The company would raise a net $1.7 billion from the IPO assuming an offering price of $14.50 per share, the midpoint of the price range.

The company’s debt totaled $6.5 billion at the end of June.

JPMorgan Chase & Co., UBS Group AG and Citigroup Inc. are managing the IPO. Barclays Plc, Credit Suisse Group AG, Deutsche Bank AG and Ireland’s Davy are also working on the offering.

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