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Digicel sets out court process and sweetens offer to holdouts

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Improved offer: Digicel chairman Denis O’Brien. Photo: Tony Gavin

Improved offer: Digicel chairman Denis O’Brien. Photo: Tony Gavin

Improved offer: Digicel chairman Denis O’Brien. Photo: Tony Gavin

DIGICEL has sweetened its offer to a set of bondholders who have so far rejected the telecom group's plans to slash its debts through an agreed restructuring deal.

Most Digicel bondholders have indicated overwhelming acceptance for a deal that would see up to $1.7bn (€1.6bn) of the company's debt written off while Denis O'Brien retains full control of the telecoms empire.

Digicel set out plans to implement the plan yesterday, issuing a so-called practice statement letter that outlines the administrative processes to effect the scheme. It will include a court process in Bermuda to sanction a scheme of arrangement - a legal mechanism to effect the debt reorganisation for relevant classes of bonds. An initial court hearing is expected to take place on May 12 at the Bermuda Supreme Court in Hamilton.

Digicel has said its debt pile of around $7bn is not sustainable and earlier this month proposed a deal to swap the outstanding debt for a reduced amount of new bonds. Most creditors have backed the plan, but not most holders of $925m of bonds due in 2023.

Yesterday the company also improved its offer to 2023 bondholders, offering new bonds worth 95cents in the dollar compared to the earlier 85cents and it extended the deadline to accept the proposal.

Irish Independent