April 23, 2024

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Digicel plans to liquidate Panama business after rivals’ merger approved

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By Elida Moreno

PANAMA City (Reuters) – Mobile cellphone operator Digicel claimed Wednesday it ideas to wind down operations in Panama subsequent the government’s acceptance of a merger involving rivals Cable & Wireless Panama (CWP) and Claro.

The merger, in which the Panamanian government will be a 49% shareholder and presents the companies 56% of the market place, “efficiently spells the conclude of opposition in the telecoms sector for more compact players,” Digicel explained in a assertion.

Digicel said it was making use of for voluntary liquidation, getting not succeeded in various initiatives soon after CWP announced in late 2021 it would obtain The united states Movil subsidiary Claro’s functions in Panama.

These initiatives provided appointing an investment lender to market the business to money and strategic events, extensive engagement with authorities about the prepared merger and proposals to migrate buyers to yet another operator which were being not taken forward.

With Digicel exiting the current market, there would be only one particular telecom service provider, Millicom-owned Tigo, running in addition to the merged CWP-Claro entity in Panama.

“It is not sustainable for us to go on investing in the marketplace,” Digicel chairman Denis O’Brien stated in the assertion, noting the enterprise paid out out $86 million for its functioning license in 2008 and yet another $575 million on enhancements due to the fact.

Digicel explained it did not expect the announcement to have a material impact on its financial problem.

(Reporting by Elida Moreno in Panama City Composing by Kylie Madry Enhancing by Edwina Gibbs)

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