Liberty Latin America set for independent life from end of year

Liberty Global’s Latin American and Caribbean arm is to become an independent company – Liberty Latin America – with shares trading on the NASDAQ Global Select Market from January 2.

The ‘record date’ for the split-off has been set for December 26, with distribution of common shares to take place on December 29. Holders of Class A, Class B and Class C ordinary shares in the company, hitherto know as LiLAC Group, will receive a distribution of one Liberty Latin America share of the same class for each such LiLAC Group ordinary share held as of the record date.

Liberty Latin America Class A and Class C common shares will be listed on the NASDAQ Global Select Market under the symbols LILA and LILAK respectively, and Class B common shares will be quoted on the OTC markets under the symbol LILAB.

Speaking at the recent UBX Annual Global Media and Communications Conference, Liberty Global president and CEO Mike Fries said that he was “really excited about the management team” for Liberty Latin America, which is headed by former Liberty Global CTO Balan Nair as CEO. He said penetration of pay TV and broadband in the region was only half what it was in North America, giving the company a huge opportunity for growth. He said that there is “a massive consolidation opportunity” in a market that remains highly fragmented. “There really are no scale players and I believe we could be one of those scale players,” he said.

LiLAC/Liberty Latin America’s business principally comprises former Liberty Global networks in Puerto Rico and Chile – LCPR and VTR respectively – and the assets of Cable & Wireless Communications, which it acquired two years ago. VTR in Chile is Liberty Latin America’s biggest single operating unit. CWC operates networks in the Caribbean and Panama, its largest single market. The CWC business has been more focused on mobile than Liberty’s other units and one of Nair’s priority is likely to be building out fixed infrastructure in the region.

LiLAC added 40,000 revenue-generating units in the quarter to September and delivered revenues of US$908 million and operating cash-flow of US$359 million, flat year-on-year.

The company’s results were hit by Hurricane Maria earlier this year, which caused significant damage to physical infrastructure across the Caribbean. At the UBM conference, Fries said that the Hurricane damage was a “setback”, but added that Liberty was “working tirelessly” to get the business back on track, particularly in Puerto Rico. “We view this as a temporary situation. Long-term it doesn’t change the opportunity,” he said.

On LiLAC’s Q3 conference call, incoming CEO Nair said that he would be “particularly focused on growing revenue in these under-penetrated and under-served markets”. He said that the company would continue to benefit from sister outfit Liberty Global’s scale and “its ability to negotiate attractive pricing with vendors and investments in technologies such as next-generation set-top boxes, fast broadband, the IoT, mobile, and new forms of customer service”.

CWC CEO John Reid is meanwhile to step down from his position early next year. An announcement on his replacement will be made in due course.

“John has been an exceptional leader for us, steering Cable & Wireless through significant changes and transformation; we have valued John’s dedication and energy and wish him the very best for the future,” said Fries.

“It has been a great privilege to lead C&W through the integration with Columbus and more recently with Liberty Global. With the planned split-off of Liberty Latin America, now is the right time to let new leadership take the business through its exciting next chapter. I am proud of what we have achieved during my tenure; with our focus on delivering an unparalleled customer experience starting to translate into performance momentum, and a talented new leadership team in place, C&W is ready for its next phase of growth,” said Reid.