Conceding to an overnight deal with bondholders, Digicel’s founder, Denis O’Brien, is set to ‘let go of the reins’ as the company has agreed to a comprehensive plan reduce its debt.
O’Brien will become a minority shareholder and remain a director at the company.
“Digicel’s founder, Mr. Denis O’Brien has endorsed the Proposed Transaction as a positive outcome for the business. Mr. O’Brien would remain actively involved in the business as a director and retain an equity interest in the recapitalized business,” the company stated in press statement.
Digicel on Tuesday night announced that it had reached an agreement in principle with a committee of its creditors regarding the key terms of a transaction in its debt restructuring scheme. The company is continuing discussions to negotiate definitive documentation.
The agreement will see the proposed transaction reducing total debt by US$1.8 billion and place Digicel on a sustainable footing post-Haiti earnings impact. Since September, the deteriorating and unprecedented situation in Haiti led the company to shift its focus to a more holistic solution for the company’s capital structure.
The statement said shortly after the completion of the sale of Digicel Pacific in July 2022, the company has been actively engaged with its key creditors.
“While parties initially sought solely to extend the maturity of the DL 6.750% Senior Notes due March 1, 2023 (the “Notes”), 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. Accordingly, discussions have since focused on a comprehensive transaction,” the company released added.
It was noted that the proposed transaction would reduce the Group’s consolidated debt by approximately US$1.8 billion and reduce its annual cash interest by approximately US$110 million while ensuring sufficient cash to fund operations and invest in key growth areas.
“While no definitive agreement concerning the material terms of the Proposed Transaction has been reached and no assurances can be provided that an agreement will be reached, based on momentum to date and agreement in principle on key terms, the Company believes a consensual and comprehensive restructuring is achievable,” the press statement added.
