Digicel Group to sell 450 cell towers across the Caribbean
Published:Tuesday | June 19, 2018 | 12:00 AMSteven Jackson/ Senior Business Reporter
Digicel Group Limited plans to sell hundreds of its Caribbean cell towers in a bid to reduce its leverage. Details are still emerging, but the company plans to finalise the deal in the second quarter of this financial year. The terms of the deal, the geography and purchaser were not disclosed.
"To clarify, we have signed a sale and leaseback agreement for 450 towers in the Caribbean and the deal is expected to close at the end of the second quarter of this fiscal year," said Antonia Graham, head of group communication at Digicel Group. "We will not be giving any other details at this time."
That timeline equates to roughly the end of September. Digicel further clarified that the towers within the deal represents "a fraction" of its total towers across the region, but did not specify the number of towers it owns.
The Financial Gleaner understands that the deal will reduce Digicel's leverage ratio from 6.7 times debt to equity to 5.7 times following the sale and lease of the towers.
Digicel also offloaded other cell towers last year. The telecoms is reported to have sold 202 communication towers in El Salvador to USA-based Phoenix Tower International in a multimillion-dollar deal.
Digicel Group operates in over 30 territories spanning the Caribbean, Central America and the Pacific Islands. The telecoms made a loss of US$217 million on revenues of US$2.4 billion for its financial year ending March 2018. That equated to a more - than - sixfold contraction, relative to US$34 million of annual losses at March 2017.
The operating level
However, at the operating level, Digicel's earnings before interest, tax, depreciation and amortisation, or EBITDA, remained positive at US$1 billion, albeit declining two per cent relative to the previous year. Its EBITDA margin remained at 43 per cent.
The group indicated that its full-year performance was in line with expectations. Revenues were down year-on-year due to a number of factors affecting different markets, including declining voice calls, hurricanes, and tariff changes.
Jamaica contributed about 16 per cent to group revenues and showed improved results, particularly in the final quarter. Digicel also reported a 68,000 rise in subscribers for Jamaica.