Digicel reports ‘overwhelming support’ for debt restructure

Digicel reports ‘overwhelming support’ for debt restructuring plans

22 May 2020 | Alan Burkitt-Gray

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Digicel has received “overwhelming support” from its debtholders for its restructuring, the company has told Capacity.

The company, which has operations across the Caribbean, Central America and the Pacific, began a court process this week after reporting US$7.4 billion in outstanding debt, which is said was “unsustainable”.

A Digicel spokesperson told Capacity: “For Digicel it is business as usual and there is no impact on our day operations. Indeed when our refinancing is complete in a few weeks’ time, we will have reduced our debt by $1.7 billion and reduced our annual interest payments by $125 million.”

The company, owned by Irish businessman Denis O’Brien (pictured), reported in an official statement: “Following overwhelming support from our debtholders for these proposals, we are now progressing with the required administrative processes.”

The statement added: “This scheme has the support of over 97% of its bondholders and also involves the appointment of light touch joint provisional liquidators to oversee the implementation of the scheme.” KPMG has been appointed provisional liquidators, Capacity reported yesterday.

Digicel is headquartered in Jamaica, where it started up in 2001, and is registered in Bermuda.

The official statement said: “It’s important to point out that this will have no impact on our day to day operations, our staff, our suppliers, our customers or any aspect of our ongoing activities – it is business as usual.”

A report last night by Irish broadcaster RTÉ said that Digicel “has received tenders for almost all of the $1.3 billion worth of debt that must be repaid next year, which will be exchanged for notes worth $1.2 billion”.

The report added: “The maturity dates on these notes will also be extended to dates ranging from 2024 to 2026. … But an insufficient amount of the holders of $925 million of debt due to mature in 2023 accepted offers made to them by the company and so that part of the debt exchange will not now proceed.”