Digicel, a communications and entertainment provider in the Caribbean, Central America and Asia Pacific, has concluded what it calls the last significant milestone in the process to reduce its debt.
The plan is expected to reduce its total debt by approximately $1.6 billion to about $5.4 billion and lower annual cash interest costs by approximately $125 million. The plan also extends key debt maturities.
Digicel announced the comprehensive debt reduction process on 1 April this year, following prior engagement with a number of large bondholders. The company expects the debt reduction process to be complete next week after previously announced offers to exchange existing debt of Digicel Group Two Limited for various new securities are effected.
The scheme has received strong stakeholder support, says Digicel. It has also been approved by the Bermuda Supreme Court and a federal United States court.
The company says that this debt reduction process leaves it well positioned for future growth. However, while this process mitigates what had earlier been called “unsustainable volumes of funded indebtedness”, the company is still dealing with the continuing impact of the coronavirus on company revenue.
As chief executive Jean Yves Charlier pointed out, despite an increased demand for connectivity and content services there has beeen pressure on mobile prepaid, roaming and in-store sales in the consumer segment, and the tourism sector, SMEs and governments in the company’s business solutions segment. Service revenues are expected to fall by a high single-digit percentage in the first quarter of the 2021 financial year.
Digicel Group has operations in 32 markets across Central America, the Caribbean and the Asia Pacific regions, and a total of 13 million customers.
