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Digicel debt discussions underway as default deadline looms

24 Feb 2023

Denis O’Brien’s Digicel Group has asked investors holding USD925 million worth of bonds for an initial 30-day grace period as it tries to avert a default, the Irish Times reports, citing sources familiar with the situation. As per the report, the senior unsecured bonds are scheduled to mature on 1 March 2023 and have been trading below USD0.40 on the dollar since late November, reflecting concerns about the Jamaica-based company’s ability to repay the debt in full and on time.

Encouragingly, holders of more than 70% of the bonds have already signalled support for such a ‘standstill agreement’, well above the 50.1% threshold needed, the sources said. The bondholders have also indicated a willingness to extend the grace period by a further 60 days if Digicel enters a restructuring agreement with the owners of a majority of the notes, the source added. If it comes to fruition, it would amount to a third debt restructuring by Digicel since 2019.

A Digicel Group spokesperson told the Irish Times: ‘Given upcoming bond maturities and prevailing economic conditions in various markets, Digicel remains in active and ongoing discussions with its creditors and advisers on a number of strategic alternatives with respect to a potential financial restructuring. The proposed grace period would provide the company with additional flexibility to facilitate any such restructuring.’

Digicel’s net debt stood at around USD4.2 billion as of 30 September 2022.

Ireland, Jamaica, Digicel Group

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