The sale of Digicel Group Holdings Limited South Pacific operations to Australian telecommunications company, Telstra Corporation Limited have moved one step closer to reality.

This has come about as the parties have signed a binding agreement for the sale of Digicel Pacific Limited, which is a wholly-owned subsidiary of Digicel Group Holdings Limited. Digicel Pacific Limited have been valued at up to US$1.85 billion, which includes a three year US$250 million earn-out factor, which is subject to customary post-closing adjustments. 

The transaction, which remains subject to customary government and regulatory approvals is to be completed in the first quarter of 2022. Digicel Pacific Limited operates in six markets in the South Pacific including Papua New Guinea, Fiji, Samoa, Vanuatu, Tonga and Nauru.

For the year ended March 31, 2021, Digicel Pacific Limited recorded sales of approximately US$450 million and adjusted earnings before interest, tax, depreciation and amortization (‘Adjusted EBITDA’) of approximately US$222 million

No changes to Digicel Pacific Limited management team

On completion of the deal, Digicel Group Holdings Limited will have no operational responsibility for the Pacific operations though customary transition services will be provided by Digicel Group Holdings Limited for a short period. There will be no change to the Digicel brand in the six markets and the current Digicel Pacific Limited management team will remain.

In order to facilitate a seamless transition, Digicel Group Holdings Limited Chairman and founder of the company, Denis O’Brien will join the board of directors of the newly formed holding company for the South Pacific business.

Commenting on the impending sale, O’Brien said “Today’s announcement is a tremendous testament to our colleagues across Digicel Group and in particular, our 1,700 staff in the Pacific. In 2006, we established a business in the South Pacific region that has helped democratize mobile communications and transform local economies and societies by making affordable best-in-class communications available to more than 10 million people across six of the most exciting markets in the South Pacific region.”

According to the Digicel Chairman, “I am very pleased that today’s agreement with Telstra, our very near neighbour in the Pacific, will further enhance DPL’s infrastructure, data and call termination links with one of the largest and most reliable networks in Australia. I thank all of our colleagues in the South Pacific and beyond who have made today possible and I remain committed to ensuring a successful transition in my ongoing role as a director of the newly formed holding company for Digicel Pacific Limited.”

In concluding O’Brien remarked, “from a Digicel perspective, today marks a very successful realization of a strategic investment following our entry in the South Pacific in 2006.”