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Dissenters doubt details of Digicel debt deal

17 Mar 2023

Digicel Group’s proposed debt restructuring plan is struggling to win over a number of key creditors, the Jamaica Observer has reported, quoting a paywalled article from the Sunday Times. The report, which cites credit intelligence firm Reorg, notes that holders of 57% of term loans issued by Digicel International Finance Limited (DIFL) and 46% of the DIFL secured note holders are not supportive of the agreement tabled by Denis O’Brien late last month. Discussions between all parties are said to be ongoing, however.

On 28 February – one day before the company was due to pay USD925 million in outstanding bonds – Digicel announced 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. Under the terms of the agreement, O’Brien – who currently owns 99.9% of Digicel – could see his stake cut to around 10%. However, if the restructuring deal collapses, or if creditors push for a more punitive outcome, O’Brien’s stake could potentially dwindle even further.

Bloomberg has named Golden Tree Asset Management, PGIM Fixed Income and Contrarian Capital Management as the firms that are set to take control of Digicel when O’Brien cedes his stake.

Ireland, Jamaica, Digicel Group

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