Australian govt reportedly mulling aiding Digicel bidder

14 Jan 2021

The Australian government is reportedly considering using the nation’s export credit agency to provide support to bidders looking to acquire Digicel Group’s Pacific operations, Australian paper WA Today writes, citing government sources. The Irish-owned, Jamaica-based group was reported to have begun examining the potential sale of its subsidiaries in the Pacific region late last year after it received ‘unsolicited approaches from a number of parties’ regarding the units. The debt-laden group’s operations in the region comprise units in Papua New Guinea, Fiji, Tonga, Samoa, Vanuatu and Nauru, and with an estimated value of up to EUR1.6 billion (USD1.95 billion) a successful divestment of the units could wipe a substantial sum from Digicel’s USD5.4 billion debt burden.

China Mobile is seen as the company most likely to enter a bid for the division and although Digicel has not revealed the identities of the parties it is currently in talks with, in May 2020 (i.e. prior its reported initiation of sales proceedings) it had denied rumours that it was in talks with the Chinese firm to offload its operations in the region. Nevertheless, Australia’s national security agencies were reportedly concerned about the prospect of a Chinese state-owned firm gaining access to critical infrastructure in the region, leading the government to consider offering subsidised loans or loan guarantees to other bidders. The sources also noted that there were also worries that Digicel might exploit national security concerns to extract money from the Australian government.

Australia, Fiji, Jamaica, Nauru, Papua New Guinea, Samoa, Tonga, Vanuatu, China Mobile Communications Group (previously CMCC), Digicel (Nauru), Digicel Fiji, Digicel Group, Digicel PNG, Digicel Samoa, Digicel Tonga, Digicel Vanuatu