| The Irish Times | Extract
DUBLIN - The downward spiral in relations between China and Australia in the past year has played into the hands of businessman Denis O’Brien as he looks to further reduce the debt burden of his Digicel telecoms group.
Early last year O’Brien effectively forced bondholders to write off $1.6 billion (K5.6 billion) of what they were owed.
Now he is looking at selling off the least-indebted part of the group: its Pacific business, spanning Papua New Guinea, Fiji, Samoa, Vanuatu Tonga and Nauru.
Just 150km separates the Australian and PNG mainlands. It’s only 4km if you consider their islands in the Torres Strait.
Talk last year of Chinese interest in Digicel Pacific was enough to goad the Australians into action and inject a bit of competitive tension into the process – underpinning the $2 billion (K7 billion) price tag being bandied about.
Relations between China and Australia hit a bump when in 2018, amid cybersecurity concerns, Australia banned Shenzhen-based Huawei from having any part in its 5G broadband network.
Then in May 2020, after Canberra called for an independent investigation into the initial outbreak of Covid-19 in Wuhan, this escalated into a full-on trade dispute – ultimately affecting Australian barley, beef, coal, wine and other exports.
It emerged two months ago that Australian telecoms group Telstra was in talks to buy Digicel Pacific, with financial backing from the Morrison government.
And it seems that things are progressing nicely, with the Australian Financial Review reporting last week that Telstra chief executive Andy Penn carried out a three-day visit to PNG last month to meet prime minster James Marape and long-time O’Brien associate Paul Connolly.
It seems a deal is likely before the end of the year which will lower Digicel’s net debt position from about $5.4 billion (K19 billion) currently and boost its equity value.