Head of Treasury and Trading at Scotia Investments, Gregory Samuels, says Digicel’s USD$6.5-billion debt shouldn’t be cause for alarm.
Speaking on Nationwide@5 last evening, Mr. Samuels says neither the market nor any reputable credit agency has responded negatively to the news.
Mr. Samuels was responding to the findings presented by financial analyst Michael Chakardijian of CreditSights, at a conference in London last week.
Mr. Chakardijian says Digicel’s debt is unsustainably high at over six times the company’s earnings.
However, Mr. Samuels says CreditSights has not presented the full picture.
According to Mr. Samuels, it’s not unusual for utility companies to have high debt ratios.
Meanwhile, another analyst says concerns over Digicel’s debt burden are understandable.
Dr. Maurice McNaughton is Director of the Centre of Excellence for IT enabled Business Innovation at the Mona School of Business and Management.
Dr. McNaughton says Digicel must successfully make the switch from mobile markets towards other business models to ensure its viability.