Pan-Caribbean telecom firm Digicel Group has said it is ‘confident it is well positioned to address upcoming maturities ahead of time’ after ratings group Fitch downgraded its stance on the creditworthiness of the telco and its subsidiaries, the Irish Times writes. Fitch questioned the operator’s ability to deal with USD925 million of bonds that fall due in March 2023 without a ‘coercive exchange’, in light of the challenging market conditions in Digicel’s key markets. In June 2020 Digicel’s bondholders were forced to write off USD1.6 billion of the group’s debt pile at the time of around USD7 billion. More recently, the group used USD1.1 billion of its proceeds from the sale of its Pacific division to redeem bonds due in 2024. However, according to the agency Digicel’s forecast EBITDA over the next two years is insufficient to enable it to reduce its debt ‘in any meaningful way’, jeopardising its potential to successfully refinance notes due to mature in March 2023.
For its part, Digicel Group argued that it was well-positioned to address the maturities, citing ‘the strength of its underlying business’ without commenting on how it would proceed. Regarding its recent results, the group claimed EBITDA of USD241 million for the three months to end-June 2022, a 2% drop year-on-year driven by currency weakness in some of its main markets. Underlying service revenue for the quarter was up 9% to USD585 million, which Digicel claimed equated to a 4% rise in reported revenue.