Creditors unconvinced by Digicel’s debt agreement

Creditors unconvinced by Digicel’s debt agreement

Several of Digicel Group’s major creditors have reportedly expressed reservations over Chairman Denis O’Brien’s proposed agreement for restructuring the group’s debt.

The agreement was first revealed on 28th February 2023 - one day before Digicel’s 1st March deadline for paying US$925 million in outstanding bonds. Together with a committee of its creditors, Digicel has agreed in principle to a debt-for-equity exchange projected to cut its consolidated debt by roughly US$1.8 billion.

O’Brien currently owns 99.9% of Digicel, and under the proposed agreement this could fall to as little as 10% - with the possibility of dropping even lower if the restructure falls through, or creditors demand a harsher resolution.

The Jamaica Observer reports that this may yet happen, with the agreement failing to win the backing of the holders of 57% of term loans granted to Digicel International Finance Limited (DIFL), as well as 46% of the DIFL secured note holders. However, talks are still underway between all parties.

Once O’Brien relinquishes his majority holding, Digicel will be controlled by Golden Tree Asset Management, PGIM Fixed Income and Contrarian Capital Management, reports Bloomberg.

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