Australia's Telstra acquires Digicel Pacific [1]
Friday, July 15, 2022 - 21:49. Updated on Thursday, September 8, 2022 - 14:45.
Telstra announced yesterday it had completed the acquisition of Digicel Pacific in partnership with the Australian Government.
The acquisition which was initially announced in October 2021 was finalised, after necessary government and regulatory approvals.
Telstra contributed US$270 million of equity to the US$1.6 billion purchase price and the Australian Government, through Export Finance Australia, provided the remaining US$1.33 billion, through a combination of non-recourse debt facilities and equity like securities.
As Australia's leading telecommunications company, Telstra now owns 100 per cent of the ordinary equity.
Telstra CEO, Andrew Penn said Digicel Pacific would be operated by Telstra International, headed by Oliver Camplin-Warner, as a stand-alone business, with the same Digicel Pacific team.
“We are very pleased the deal has completed and we welcome Digicel Pacific to the Telstra family.
“We have been working closely with Pacific Governments on this acquisition and we’d like to thank them for their cooperation and support. We look forward to continuing to work with them as we operate Digicel Pacific and strengthen our relationships in the region.”
Digicel Pacific, which is the leading provider of communications services across Papua New Guinea, Fiji, Nauru, Samoa, Tonga and Vanuatu will be overseen by a Telstra controlled board, chaired by Telstra Enterprise Group Executive, David Burns.
The company had around 2.8 million subscribers and 1700 employees generating US$466 million in service revenue for the financial year ended 31 March 2022.
Telstra expects Digicel Pacific depreciation and amortisation, including purchase price amortisation arising from the transaction, of around US$160 million per annum.
Post completion, Telstra will account for this acquisition in the income statement as a 100 percent wholly owned entity.
Stronger Pacific family
Meanwhile, the Australian Government welcomed Telstra’s acquisition of Digicel Pacific.
The Minister for Foreign Affairs, Senator Hon Penny Wong said, the Australian Government’s support for this transaction reflects in their commitment to help build a stronger Pacific family, through investment in high-quality infrastructure.
"Telecommunications and digital access are critical to sustainable economic growth and development outcomes into the future."
The Minister for Trade and Tourism, Senator Hon Don Farrell, said this marks a significant milestone in Australia’s economic engagement with their Pacific family.
This transaction sends a positive signal of business confidence in the Pacific region, and we hope it will encourage further investment in the region from top tier Australian companies, he said.
Tonga
Oliver Camplin-Warner, Telstra International CEO, said the deal was an exciting milestone for the Digicel Pacific business and its customers in Tonga.
“The Digicel Pacific team in Tonga have amazing local expertise and are leaders in digital experiences for their customers. Together, we’ll work to ensure Digicel remains the top provider in Tonga,” he said.
He confirmed there would not be any local job losses in the Pacific as part of the acquisition and the current Digicel Pacific team would continue the day-to-day running of the business.