'Conversations are going well' - Digicel chairman Denis O’Brien as telecoms firm seeks to agree swap deal with bondholders
Digicel chairman Denis O’Brien said “conversations are going well” as the telecoms business seeks to agree a swap deal with bondholders.
The deadline for bondholders to accept the swap offer has been extended a number of times as negotiations continue.
“We knew this was going to take a long time because you have so many different views of people and we’re trying to find a consensus that we’re happy with and our bondholders are happy with. So it’s very consultative and the conversations are going well. It’s just bringing everybody with you, as such, is what it’s all about,” Mr O’Brien said in an interview with Bloomberg Television.
Under the swap offer, bonds with an 8.25pc interest due in 2020 would be swapped for new bonds due in 2022, also with an 8.25pc interest rate.
Another class of bonds, due in 2022 and with a 7.125pc interest rate, would be swapped for new bonds due in 2024, with an 8.25pc interest rate. Cash interest would be 7.125pc and payment-in-kind interest (interest rolled up as new debt) would be 1.125pc.
After the offer was made a group of bondholders seeking better terms was formed - with investment bank Moelis & Co and law firm Akin Gump coming on board to advise the group.
One of the issues that is believed to have emerged in discussions was an element of the plan that would see the new 2024 notes subordinated to other parts of Digicel's capital structure
Speaking about Digicel’s performance, Mr O’Brien said the company had spent $2.3bn on capital expenditure in the last four years, including the roll-out of fibreoptic networks and building up entertainment assets.
“We feel that we can now increase the profitability of the business and go back to where it was,” Mr O’Brien said.
He said the UK was “like an emerging market at the moment” after the resignations of a number of Ministers in protest at Theresa May’s proposed withdrawal agreement.
“You’d probably have to say it’s going to be very difficult for her to win a parliamentary vote to approve the deal at this stage,” Mr O’Brien said.