Digicel says glitch cleared on Claro deal
Published:Wednesday | June 1, 2011 | 12:00 AM
Digicel Group said Monday that the glitch on the merger application in El Savador has been cleared, and was confident of the deal's approval.
The Irish company's business in El Salvador and neighbouring Honduras is part of an exchange deal between Claro owner America Movil and Digicel.
News of a possible setback on that leg of the deal emerged late last week, when it was reported that Superintencia Competencia, the competition watchdog in El Salvador, had rejected the application for approval of the proposed deal.
Antonia Graham, head of public relations for the group, said the problem arose because one of the documents had not been translated. This, she said, has since been done.
"The application has not been refused. This is a procedural matter. The application was required to be re-submitted, as one document was required to be translated," said Graham.
"This has now been done and we are confident that we will obtain the necessary approvals in due course," she added.
The deal, which is subject to regulatory approvals in all three countries, was first announced in March.
The parties said then the deal would close by the end of the second quarter.
Digicel first entered the Central American market through its 2006 acquisition of the El Salvador operation Digicel Holdings Limited - an unrelated company at the time.
It won the licence to operate in Honduras in December 2007, and after a year, formally launched operations with much fanfare in November 2008.
By the summer of 2009, the company had reportedly surpassed the 500,000-subscriber mark, with over 500 stores nationwide, generating around 450 direct jobs and another 3,000 indirectly through its dealer network and other partnerships.
Digicel's investments in Honduras was at US$450 million by then; however, the numbers for El Salvador were not obtained by this newspaper, and Graham was not willing to discuss the current status of operations in either country.
"We are not going to break out numbers now when it is something we have never done before," she said.
The company is also awaiting regulatory approval in Jamaica.