Digicel conducting ‘refinancing activities’ to reduce debt

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Following recent media reports that regional telecommunications giant, Digicel, has filed for bankruptcy in the Bermudian court, the company has said it is merely conducting “refinancing activities” to reduce its debt.

In a press statement on Monday, May 18, Digicel said this will not affect its day-to-day operations.

The company further said it has proposed a ‘Scheme of Arrangement’ with the Bermudian court in connection to one of its subsidiaries, Digicel Group One Limited.

A Scheme of Arrangement is effectively a procedure that allows a company to reconstruct its assets or liabilities with the approval of its shareholders/debtholders and the court.

According to Digicel, it has received “overwhelming support” from their debtholders for this proposed arrangement.

“We are now progressing with the required administrative processes. As such, we announced details of a proposed Scheme of Arrangement in the Bermudian Courts in connection with Digicel Group One Limited, which is purely an intermediate financing holding company,” the telecoms company explained.

“It’s important to point out that this will have no impact on our day to day operations, our staff, our suppliers, our customers or any aspect of our ongoing activities – it is business as usual,” Digicel added.

Below is the full statement from the telecoms company:

At the start of April, we announced refinancing activities which, when complete, will strengthen our balance sheet by reducing our debt by US$1.7 billion, extending our maturities and reducing our ongoing financing costs. Following overwhelming support from our debtholders for these proposals, we are now progressing with the required administrative processes. As such, we announced details of a proposed Scheme of Arrangement in the Bermudian Courts in connection with Digicel Group One Limited, which is purely an intermediate financing holding company. This Scheme has the support of over 97% of its bondholders and also involves the appointment of light touch joint provisional liquidators to oversee the implementation of the Scheme. It’s important to point out that this will have no impact on our day to day operations, our staff, our suppliers, our customers or any aspect of our ongoing activities – it is business as usual. We will provide further updates on this as we progress.