Friday 22 February 2019

Digicel secures 98pc bondholder acceptance on swap deal

Digicel owner Denis O’Brien. Photo: Tony Gavin
Digicel owner Denis O’Brien. Photo: Tony Gavin
Gavin McLoughlin

Gavin McLoughlin

Digicel has said 98pc of relevant bondholders have accepted a swap deal which will see the bonds paid off at a later date.

The company, owned by businessman Denis O'Brien, said 97.9pc of holders of bonds due in 2020 have agreed to be paid off in full in 2022. They have swapped their old bonds for new bonds. In addition, 97.9pc of holders of bonds due in 2022 have agreed to be paid off in full in 2024.

Any bondholder who did not accept the deal will still have their payment due on the original date, but because of the majority approval of the deal, these bondholders will see covenants stripped away and will be subordinated in the company's capital structure.

The deal has come to fruition after months of negotiations as bondholders sought to improve the terms of the original offer. Digicel launched the swap offer to try and give it more breathing room on its debt repayments. Its total debt pile is some $6.7bn (€5.8bn). The bond swap pushed out repayment dates on around $3bn of debt.

After a cancelled stock-market listing in 2015, which would have reduced its debt, Digicel was been hit by strengthening of the US dollar. Digicel borrows on the markets in US currency, but makes its money in a mix of local currencies in the markets where it trades. As well as the bond exchange, the company has embarked on an operational restructuring to cut costs and has sold off assets to reduce debt.

Mr O'Brien is acting as interim CEO of the business, stepping into the role that was held by Alex Matuschka von Greiffenclau, who died suddenly while holidaying with his family in Germany last month.

"No words can adequately express our sadness at Alex's passing or our gratitude for having worked with him. Digicel has lost a committed, hard-working and exceptional chief executive. Those of us who have been fortunate enough to know him on a personal level have lost a dear friend," Mr O'Brien said.

Irish Independent

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