Telstra in talks on government-backed Digicel deal
TELSTRA has confirmed talks are afoot to buy Digicel Pacific from Irish billionaire Denis O’brien, one of the world’s richest people, with a “significant” funding contribution from the federal government part of the possible deal.
The national telco on Monday told the ASX it had been in discussions regarding buying the company, which operates across the South Pacific region.
Sources said the possible deal was unambiguously political, and designed to stop any purchase by Chinese interests.
Mr O’brien, Digicel’s owner and founder, was listed by Forbes last year as Ireland’s wealthiest Irish-born citizen, worth $Us6.8bn.
He has held interests in telecommunications and media outfits such as independent News and Media in Ireland, and in 2001 founded Digicel which operates in 33 markets in the Caribbean, Central America and the Asia Pacific.
“Digicel Pacific enjoys a strong market position in the South Pacific region generating EBITDA of $US235M in calendar 2020 with a strong margin, as well as extensive network coverage,” Telstra said.
The company said the discussions were incomplete.
“Telstra has confirmed it has been in discussions regarding a potential transaction to acquire . . . Digicel Pacific in the South Pacific region in partnership with the Australian government,’’ it said.
“The discussions are incomplete and there is no certainty that a transaction will proceed.
“Telstra was initially approached by the government to provide technical advice in relation to Digicel Pacific, which is a commercially attractive asset and critical to telecommunications in the region.
“If Telstra were to proceed . . . it would be with financial and strategic risk management support from the government.
“In addition to a significant government funding and support package, any investment would also have to be within certain financial parameters with Telstra’s equity investment being the minor portion of the overall transaction.”