Friday 20 September 2019

Digicel bond swap negotiations 'are going well', says O'Brien

Consensus: Denis O’Brien
Consensus: Denis O’Brien
Gavin McLoughlin

Gavin McLoughlin

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.

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.

On Digicel's performance, Mr O'Brien said the company had spent $2.3bn (€2bn) on capital expenditure in the last four years, including the roll-out of fibreoptic networks.

"We feel that we can now increase the profitability of the business and go back to where it was," Mr O'Brien said.

Irish Independent

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