Digicel Said to be Interested in Buying Debt-Ridden Eircom

Mobile provider Digicel Group is refusing to say whether it is buying troubled Irish telecoms provider Eircom.

It calls the reports speculative, but has made no outright denials.

It would represent the second major acquisition this year by the Denis O’Brien-owned group, but also a departure from the typical low-penetration mobile markets that Digicel tends to favour.

“We have no comment. We don’t comment on speculation,” said Antonia Graham, head of group public relations.

Denis O'Brien, chairman of Digicel Group

Eircom last week delayed the release of its financials amid restructuring its €3.7 billion debt, according to filings to shareholders. Last week, Eircom said it was approached by a third party but declined to identify the provider. The Sunday Times, a UK-based newspaper, however, named the suitor as Digicel.

Eircom provides fixed-line and mobile services in Ireland with some €2 billion in turnover and €692 million in earnings before interest, depreciation and amortisation for its financial year ended June 30, 2009.

Digicel began operations 10 years ago in Jamaica and expanded into some 32 countries. The company last year reported US$2.23 billion in revenue and a subscriber base of 11.5 million, more than two million of them in Jamaica.

In March, Digicel announced that it would conduct a swap of assets with rival Claro. Jamaica has approved the deal, but decisions by Honduras and El Salvador are still pending.

Digicel is set to receive a net cash payment, reportedly of US$350 million, when the deal closes.

Source: Jamaica Gleaner

Start the discussion ...