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Digicel agrees in-principle deal with creditors for debt-for-equity swap

2 Mar 2023

Up to 90% of the shares of pan-Caribbean telecoms firm Digicel Group may be handed to creditors as part of a deal to take control of the business in exchange for writing off USD1.8 billion from its substantial debt pile, the Irish Times writes, citing unnamed sources. Digicel confirmed yesterday that it had reached an in-principle agreement with a committee of creditors for a debt-for-equity swap that would reduce the group’s consolidated debt by around USD1.8 billion while ‘ensuring sufficient cash to fund operations and invest in key growth areas’. The full terms of the proposed deal were not published but sources were cited as saying that bondholders are seeking a substantial stake in exchange for reducing the amount they are owed, with Irish businessman Denis O’Brien expected to reduce his stake in the group from 99.9% to between 10% and 20%.

As previously reported by CommsUpdate, Digicel has struggled to tackle its debt burden in recent years amid challenging conditions in several of its key markets. In June 2020 the group completed a debt restructuring programme that cut its debts by around USD1.6 billion to USD5.4 billion by exchanging existing notes for new securities of a lower value. Last year, Digicel paid off around USD1.1 billion of its dues with the proceeds from the sale of its Digicel Pacific Limited (DPL) division, which comprised its operations in Papua New Guinea, Fiji, Samoa, Vanuatu, Tonga and Nauru. Nevertheless, the group entered discussions with its bondholders in late 2022 with a view to postponing the repayment of debts totalling around USD925 million that were due on 1 March 2023. Digicel confirmed in a statement this week that these talks had initially sough solely to extend the maturity of the notes but the ‘the deteriorating and unprecedented situation in Haiti since September 2022 led the company to shift its focus to a more holistic solution for the company’s capital structure’.

Jamaica, Digicel Group

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