Digicel expects to close Pacific sale by end of month

11 Jul 2022

Irish-owned, Jamaica-based Digicel Group saw annual service revenue grow by 4% to USD2.2 billion for the financial year ending 31 March 2022, whilst EBITDA grew at a similar rate, to USD972 million, the Irish Times reports. The paper cites unnamed sources as saying that the group informed bondholders that the planned sale of its Pacific unit is now expected to close by the end of July, after Digicel agreed to enter arbitration with the government of Papua New Guinea (PNG) to resolve a disagreement over a new tax bill.

As previously reported by TeleGeography’s CommsUpdate, Digicel Group agreed in October last year to sell its Pacific operations – including its subsidiaries in PNG, Nauru, Samoa, Tonga, Fiji and Vanuatu – to Australia’s Telstra for around USD1.6 billion, roughly USD1.3 billion of which is to be provided by a financing package from the Australian government. In April 2022, however, the PNG government approved an amendment to the Income Tax Act which introduced a new Additional Company Tax (‘ACT’) on the telecommunications and banking sectors, which would impose a one-off charge of PGK350 million (USD97 million) on Digicel PNG. Digicel said at the time that the levy could impact the agreed sale, with the group’s owner Denis O’Brien claiming that Digicel had been given assurances by PNG Prime Minister James Marape that the new tax would not be introduced.

According to the most recent reports, Digicel has agreed to put the disputed USD100 million into an escrow account pending the outcome of the arbitration process, whilst the PNG government has agreed to waive the non-payment penalty attached to the tax bill.

Jamaica, Papua New Guinea, Digicel Group, Digicel PNG, Telstra (incl. Belong)