Digicel operations ‘business as usual’ as holding company files for bankruptcy

Irish-owned, Jamaica-based telecoms group Digicel has filed for Chapter 15 recognition in a federal bankruptcy court in the US, following a similar filing before the Bermudan courts earlier this week, as part of its planned debt restructuring scheme. Digicel notes that the move will have no impact on its day-to-day operations, stating in a press release that ‘it is business as usual’. The filings refer to a non-operating intermediate holding company – Digicel Group One Limited (DGL1) – and the company’s liquidation is part of a deal with Digicel’s bondholders to reduce the group’s debt pile by around USD1.7 billion by having five categories of bondholders exchange their securities for notes of a lesser value. The Irish Times notes that, as part of the scheme, DGL1 and the company above it will be wound up and replaced by a new company, Digicel Group 0.5 Limited (DGL0.5), which will control the group’s operations across 32 markets in the Caribbean, Latin America and Pacific regions. In a court filing, Digicel explained that the Chapter 15 filing was ‘necessary to ensure that scheme creditors are treated consistently, that the Bermuda Court’s sanction of the scheme is enforceable in the US, and that the company and its property are protected from seizure or lawsuits in the US.’