Digicel’s upcoming initial public offering (IPO) is likely to raise over $1.5bn, LatinFinance understands.
The deal, set to be a landmark for equity issuance from Caribbean-headquartered companies, comes as large telecommunications firms express interest in Latin American. Cross-border firms are well-placed to acquire telecom assets at good prices in the region due to depreciating currencies, a LatAm M&A banker said.
A global pool of investors picked up a stake in Telefonica Brasil, known as Vivo, which Vivendi sold recently.
Latin America’s telco sector is expected to grow in the medium-term but barriers to entry are high. Carlos Slim’s América Móvil is the largest telecoms group in Latin America. European and US-based investors don’t want to enter the market and “fight for third or fourth place”, said one source.
Stockholm-based Millicom recently announced plans to extend its cable network in Latin America and intends to become the second-largest group after América Móvil. Millicom operates in 41 countries across Latin America and Africa.
Mauricio Ramos, Millicom chief executive, said broadband penetration was low in the region and has outlined plans to lay cable networks in Colombia for television services. Ramos said data adoption through mobile technology remains another area of growth in the region.
Millicom has been linked with Cable & Wireless for a possible merger, according to media reports. The UK telecoms group operates mobile services throughout Latin America and the Caribbean. LF