Denis O'Brien's team of advisers will begin a roadshow for the $1.4 billion (€1.06 billion) private placement of debt within two weeks. This forms a key part of his plan to take full ownership of Digicel's mobile phone operations in the Caribbean as part of a complicated $2.4 billion deal.

It is understood that Digicel will raise about $1 billion in corporate bonds, which will carry an interest rate of 8-9 per cent.

Mr O'Brien will raise an additional $400 million from payment-in-kind (PIK) notes. These will carry a higher coupon, or interest rate, of 15 per cent or more. The notes are structured in a way that payments are not due until the end of an agreed period. In Digicel's case, this will be 2015.

The advantage of PIK notes, according to market sources, is that Mr O'Brien could repay them early without having to pay a premium. "This gives the borrower great flexibility," said one fund manager. "It also means that, after a couple of years, when the cash flows of the business have grown, they can refinance this debt at a lower interest rate without being hit with a penalty."

US banking giant Citigroup is Digicel's lead adviser. It has also retained JP Morgan, Credit Suisse and Lehmann Brothers. Mr O'Brien is being advised by Rothschild, a UK bank. Davy and Goodbody Stockbrokers are also advising on the transaction.

Mr O'Brien's decision to refinance the business means he has postponed plans for an initial public offering (IPO) of shares in Digicel. According to one source, advisers on the proposed IPO concluded it should not float at this time. They projected "staggering" subscriber growth over the next three years. Digicel has about four million subscribers in 22 Caribbean markets.

This deal only involves Digicel's Caribbean licences. Operations in Samoa, Papua New Guinea, Fiji and the Solomon Islands are held by a sister company, Digicel Pacific. Mr O'Brien has pulled back from his plans to enter the US mobile market as a virtual network operator.