Sunday 18 November 2018

Digicel bondholders tap US law firm

Dennis O'Brien, chairman and co-founder of Digicel Group Ltd
Dennis O'Brien, chairman and co-founder of Digicel Group Ltd
Donal O'Donovan

Donal O'Donovan

A group of Digicel bondholders has organised to negotiate with the company for better terms on its proposed $3bn (€2.59bn) debt exchange, and is working with US law firm Akin Gump Strauss Hauer & Feld, it is understood.

It is not clear if the law firm is working with owners of single or multiple classes of Digicel bonds. Citi is leading the swap exercise for Digicel. The Denis O'Brien-owned mobile telecoms business has proposed a refinancing to bondholders that includes a new corporate structure in which new debt will be issued from two new holding companies inserted between holding company Digicel Group Ltd and operating company Digicel Ltd, according to a company statement. The scheme will ultimately push back debt maturities on bonds scheduled to fall due in 2020 and 2022.

Digicel's offer is to exchange $2bn of bonds due in 2020 that carry an 8.25pc interest rate, with up to $2bn of new bonds at the same interest rate but maturing in 2022. It is also offering to swap $1bn of bonds that mature in 2022, and pay a 7.125pc interest rate, for $1bn of bonds due in 2024 - with interest of 8.25pc paid in a mix of cash and deferred or so called payment-in-kind (PIK) notes. Bondholders' early tender deadline to accept the swap at the best terms is September 14, with a final acceptance deadline of September 28. Bondholders may look to push back the timetable if they seek revised terms.

Additional reporting Bloomberg

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business