Digicel refinancing has “no impact on operations”, says Tonga CEO [1]
Thursday, May 21, 2020 - 13:10. Updated on Thursday, May 21, 2020 - 15:28.
Telecommunications provider Digicel Group, the largest phone carrier in the Pacific Islands, with headquarters in Jamaica, reports that it is working to refinance its activities and reduce its multi-billion dollar debts.
Digicel Tonga CEO, Anthony Seuseu said in a statement yesterday, “It’s important to point out that this will have no impact on our day to day operations, our staff, our suppliers, our customers or any aspect of our ongoing activities - it is business as usual.”
“We will provide further updates on this as we progress,” he said.
“At the start of April, the Digicel Group announced refinancing activities which, when complete, will strengthen its balance sheet by reducing its debt by US$1.7 billion, extending maturities and reducing ongoing financing costs.”
He stated that the Digicel Group was progressing with the required administrative processes with a proposed scheme of arrangements in the Bermudian Courts in connection with Digicel Group One Limited, an intermediate financing holding company. Joint provisional liquidators will oversee implementation of the scheme.
Denied China Mobile deal
Last week Digicel denied reports of a proposed deal for the sale of Digicel to China Mobile.
Digicel, which provides communications in Fiji, Samoa, Tonga, Vanuatu and Nauru stated that there was no basis to the article in the Australian Financial Review on the sale of the company. It was reported that this deal had raised concerns in Canberra, Australia, and opened a new front in Beijing's battle for influence in the region.
Digicel Regional CEO, Pacific Markets, Shally Jannif, stated on May 14, “We can categorically state that there is no basis to this whatsoever and that no approach has been made to us.”
“Digicel is committed to the Pacific and will continue to serve customers with the best service and customer experience.”
Digicel has operations in 31 markets throughout the Caribbean, Central America and Asia Pacific.
China and Australia
Meanwhile, Grant Wyeth a Melbourne-based political analyst specializing in Australia and the Pacific has warned in an article published by The Diplomat that China is reportedly eyeing the Pacific's largest mobile carrier. [2]
“The Australian government would likely be very wary of such a development should it occur,” he wrote.
“The strategic competition between China and Australia in the South Pacific looks likely to intensify with a potential attempt by China to gain a major share of the region’s telecommunications market. It was reported this week in the Australian Financial Review that China’s state-owned telecommunications company China Mobile is looking to purchase the local assets of the largest mobile carrier in the Pacific Islands, Digicel. The prospect would be of serious concern to Canberra, which would undoubtedly see China Mobile as another “high risk vendor” alongside Huawei, and a threat to its security relationships throughout the Pacific.”
Wyeth reported that all companies, including private companies, have a unique relationship with the Chinese government. Article 7 of China’s 2017 National Intelligence Law [3] states Chinese companies must “support, cooperate with and collaborate in national intelligence work” when asked to do so.
“When Article 7 is applied to telecommunications companies the potential for the CCP to gather sensitive information becomes very real,” he wrote.
Fibre optic cable management
Digicel Tonga holds a 16.67% shareholding in Tonga Cable Ltd., a partly state-owned enterprise that manages Tonga's international submarine fibre optic cable connection.