Digicel moves to refinance debt

By Geoff Percival

Digicel has announced debt- refinancing plans which will see its repayment deadlines extended. The Denis O’Brien telecommunications company is focused on emerging markets.

It is headquartered in Jamaica and has a presence in 31 countries mainly in the Caribbean and south Pacific areas.

It has debt of about $6.8bn (€5.8bn) which is owed to banks and bondholders.

The company’s bond value fell earlier in the week after weak quarterly earnings and news of its chief financial officer Ray Leclercq announcing his intention to leave the company at the end of this month.

Those figures showed a 2% year-on-year drop in earnings before interest, tax, depreciation and amortisation to $249m, for the three months to the end of June. The first quarter of Digicel’s financial year. Revenues were down by 6% at $565m.

The value of Digicel’s $2bn of bonds which are due to be redeemed in September 2020 also fell, by 3.9%.

Digicel cancelled a stock- market listing three years ago, proceeds from which would have reduced its debt.

The company has moved to extend the maturities on its bonds. It is set to issue new bonds to replace $3bn of existing ones.

It plans to exchange $2bn of outstanding bonds, carrying an 8.25% interest rate, due to mature in 2020 with $2bn of new bonds, with the same interest rate attached, now due to mature in 2022.

It is also offering to exchange all of its $1bn in bonds maturing in 2022, with a 7.125% interest rate, and other existing 2020 bonds with $1bn of newly-issued senior cash notes due to mature in 2024 with an 8.25% interest rate.