Digicel puts brakes on IPO

(Jamaica Observer) TELECOMS Group Digicel has halted its plan to raise up to US$2.2 billion in an Initial Public Offering (IPO) on the New York Stock Exchange.

Chairman of Digicel Denis O’Brien says the decision was taken based on the volatility in equity markets, which has seen a number of IPOs listing at a discount to their signalled price range.

“This was a less attractive route for us,” he stated in a release from the company. “Given our growth outlook, an IPO for Digicel was optional and predicated on achieving fair value for the company.”

Last month, Digicel said it planned on offering 142 million shares — 124.1 million Class A common shares and up to 18.6 million additional Class A common shares at the initial public offering price, less the underwriting discount for 30 days after the date of this prospectus.

The group stated that it anticipated prices between US$13 and US$16 per share, and the net proceeds would be used for general corporate purposes, including capital expenditure and acquisitions, and to repay existing indebtedness.

O’Brien reasoned that despite significant support for the IPO from a high-quality group of investors during the marketing period, current conditions — particularly in emerging markets — have impacted transaction momentum over recent days.