Digicel founder relinquishes majority stake in debt restructuring
Jul 03, 2023 | Posted by Abdul-Rahman Oladimeji
Digicel, a pan-Caribbean telecommunications company, has settled with its bondholders to cancel nearly $1.7 billion in debt as a trade for a majority stake in the company. A restructuring agreement has been reached in which bondholders will convert their investment into an initial 62 percent stake.
The bondholders are led by US-based Contrarian Capital Management, GoldenTree Asset Management, and PGIM, which secured the support of the majority of the company's bondholders. Digicel founder Denis O'Brien will relinquish his majority stake in the company as bondholders participate in a $110 million right issue and guarantee agreement.
In the coming months, the agreement's implementation is anticipated to be formalized. Once the exchange is finalized, it is anticipated that O'Brien will retain a 10 percent stake in the company.
In 2001, the Irish businessman founded Digicel, a telecommunications corporation that operates in 32 markets throughout the Caribbean, Asia Pacific, and Central America. In a deal valued at $1.85 billion, Digicel sold its Pacific Ocean division to Australian mobile carrier Telstra in 2021. The agreement covered Vanuatu, Fiji, Nauru, Papua New Guinea, Samoa, and Tonga.