Irish-owned, Jamaica-based telecoms group Digicel has published a debt restructuring plan that aims to reduce the group’s debt pile by around USD1.7 billion, to approximately USD5.3 billion. Under the terms of the programme, Digicel is offering to exchange its current debts for new securities of a lower value. The new securities will be issued by a new holding company, Digicel 0.5 Limited (DGL0.5), which will hold the group’s assets across its Latin American, Caribbean and Asia-Pacific markets. These new bonds are convertible into a 49% stake in DGL0.5 if they remain outstanding after three years.
In a statement from the company, Digicel explained its decision for the offer, saying: ‘Despite many years of significant investment in its world-class networks and infrastructure and solid underlying performances across its markets, Digicel’s current debt levels remain high. Digicel has indicated for some time its commitment to reducing its debt to more sustainable levels and the tender offers and consent solicitations are a key step in that process’. In addition to reducing its roughly USD7.0 billion debt pile, Digicel noted that the offer and related measures – if completed with full participation – would also ‘reduce its annual cash interest payments by approximately USD130 million and extend its maturities, which will provide increased liquidity and flexibility to access additional liquidity during the next year’.