UPDATE ON DIGICEL PACIFIC

KINGSTON, Jamaica, April 4, 2022 /PRNewswire/ -- On March 29, 2022 the Parliament of Papua New Guinea approved an amendment to the Income Tax Act which introduces a new Additional Company Tax ("ACT") on the telecommunications and banking sector. The ACT imposes a one-time PGK 350 million (approximately US$100 million) tax liability on Digicel (PNG) Limited with a further penalty of a further PGK 50 million (approximately US$14 million) for non-payment.

Introduction of the new arbitrary, company-specific tax Act on March 25, 2022 without any consultation is perplexing not just for Digicel, but also for the Papua New Guinea economy given the reputational and credit rating implications of this sudden, bizarre and unprecedented tax. Under the ACT the disputed tax was payable on March 30, 2022

At a meeting last week between Denis O'Brien and Prime Minister Marape and two of his regional Governors, the Prime Minister assured Digicel that the new tax would not proceed and Digicel is now engaged in discussions with the Papua New Guinea Government and other relevant stakeholders to ensure this commitment is honoured.

This matter requires urgent resolution given its implications for the sale of Digicel's Pacific operations to Telstra but also given the knock-on consequences for all foreign direct investment exiting Papua New Guinea and the wider reputational and credit rating implications for Papua New Guinea internationally.  In parallel with these discussions Digicel is also considering its legal options in the event that this discriminatory tax is not removed.

These matters will affect the timing of the previously announced sale of Digicel Group Holdings Limited's wholly owned subsidiary Digicel Pacific Limited ("DPL") to a wholly owned subsidiary of Telstra Corporation Limited. Prior to the introduction of the ACT, all but one of the required regulatory approvals to complete the transaction had been obtained.

Digicel will provide a further update in due course.

For Reference:

About Digicel
As a Digital Operator, Digicel is in the business of delivering powerful digital experiences 1440 minutes of each day to customers – that's every minute, all day, every day.

Through its world-class LTE and fibre networks, together with its suite of 8 apps spanning sports (SportsMax), music (D'Music), news (Loop), local radio and podcasts (GoLoud), TV streaming (PlayGo), enhanced messaging and marketplaces (BiP), cloud storage (Billo) and self-care (MyDigicel app), Digicel is the only operator in its markets that can deliver that.

Serving consumer and business customers in 32 markets in the Caribbean, Central America and Pacific, its investments of over US$7 billion and a commitment to its communities through its Digicel Foundations in Haiti, Jamaica, Papua New Guinea and Trinidad & Tobago have contributed to positive outcomes for over 3 million people to date.

With its Better Together brand, Digicel is making a promise of simply more to customers and communities and its 7,000 employees worldwide work together to make that a powerful reality day in, day out. Visit www.digicelgroup.com for more.

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SOURCE Digicel Group Limited