Denis O’Brien’s Digicel mobile communications company is targeting a near $2bn (€1.8bn) reduction in its huge $7bn debt mountain through a restructuring deal with its lenders.
Ultimately, the company is asking creditors to exchange their debt for discounted, or lower value, bonds. Such a deal would see $1.7bn of Digicel’s debt effectively written off, bringing its debt pile down to $5.3bn.
If the new bonds weren’t repaid within three years, they could be converted into equity, which would see Mr O’Brien lose 49% of the company.
However, this is viewed as being an unlikely outcome given Digicel’s improved balance sheet on the back of the restructuring.
As part of the plan, Mr O’Brien is also offering to invest $50m of fresh funds into the business. This would be made up of $25m in cash and ownership of Digicel’s $25m-valued Jamaican headquarters switching from him to the company.
Digicel said it continues to hold strong positions across the 32 countries in the Caribbean, Central America, and Asia-Pacific region in which it has a presence, and remains “well-positioned” for continued growth.
It said while its current debt levels remain high, the restructuring plan marks “a key step” in reducing its debt.