An affiliate of Caribbean-based Digicel Group began Chapter 15 bankruptcy proceedings in the US as it attempts to restructure its multi-billion dollar debt pile, though the operator emphasised day-to-day activities would not be affected.
Earlier this week, liquidators acting on behalf of Digicel Group One submitted filings under Chapter 15 of the US Bankruptcy code, which covers businesses with debtors, claimants and assets across multiple countries and jurisdictions.
In a statement to stakeholders, the company said the group held a strong position in the 31 countries it operates in, but highlighted a number of market forces working against it had resulted in “unsustainable volumes of funded indebtedness”.
Among the factors was significant reductions in voice revenue, which were not offset by increased earnings from data or growth in new areas of business, broadband and TV income. In addition, the company’s board pointed to significant strain on capital from expansion into these additional services, reducing its cash position.
Other market trends cited include a cut in mobile termination rates and increased competition said to be “prevalent” in some of its operations.
As of 30 September 2019, Digicel Group One owed $7.4 billion, with the company needing to “either repay or refinance approximately $4 billion in debt over the near-to-medium” term.
Digicel operates across 32 markets in Central America, the Caribbean and the Asia Pacific.Subscribe to our daily newsletter Back