Caribbean-based Digicel Group announced a debt reduction plan which wipes $1.6 billion from its liabilities would take effect next week, after the scheme gained approval from stakeholders and legal authorities.
Its plan, which exchanges debt from one subsidiary to various new securities, is expected to reduce its total pile to $5.4 billion, cut annual interest by $125 million and extend key debt maturity dates.
The operator’s debt restructure plan was approved by its stakeholders, along with to courts in Bermuda and the US. Previously the company warned it held “unsustainable volumes of funded indebtedness”.
In a statement, CEO Jean-Yves Charlier hailed the work of its employees during the processes, but warned the impact of Covid-19 (coronavirus) in its markets, notably the Caribbean, would damage revenue for at least the rest of 2020 and had led to cost cutting.
He added “significant measures” had been implemented to mitigate its financial hit including employee pay reductions and the suspension of a proportion of board remuneration. Revenue for its current fiscal year (to end-March 2021) is expected to be down by a “high single-digit percentage” year-on-year.
“Covid-19’s impact has been both positive and negative in the first fiscal quarter of FY21,” he said. “We have seen increased demand for connectivity and content services. However there has been pressure on mobile prepaid, roaming and in-store sales in the consumer segment, and the tourism sector, SMEs and governments in our business solutions segment.”
Digicel Group has operations in 32 markets across Central America, the Caribbean and the Asia Pacific regions, with a total of 13 million customers.Subscribe to our daily newsletter Back