Digicel Group One files for bankruptcy, Samoa unaffected
The owners of the largest mobile operator in the Pacific, Digicel, has filed for bankruptcy in New York for its Bermuda based holding company, Digicel Group One Limited, having been granted an application for provisional liquidation.
Digicel has said this will reduce its debt of US$7.4 billion (T$19.24 billion) by US$1.7 billion (T$4.42 billion) and will not impact its day to day operations, staff or customers.
The announcement comes days after reports the company’s Pacific operations might be sold to China Mobile, reports which Digicel has denied.
The international company released a statement detailing the situation.
“At the start of April, we announced refinancing activities which, when complete, will strengthen our balance sheet by reducing our debt by USD $1.7 billion, extending our maturities and reducing our ongoing financing costs,” they state.
“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 per cent of its bondholders and also involves the appointment of a light touch joint provisional liquidators to oversee the implementation of the Scheme.”
Digicel Samoa Chief Executive Officer, Mark Witthuhn, said the development was shared with major customers, suppliers and government partners weeks ago.
“Bottom line, the refinancing transaction is good news not bad news,” he said, sharing a communication from the Digicel head offices.
Digicel Samoa is a separate entity to Digicel Group One.
Mr. Witthuhn said the overwhelming support by the shareholders to use 49 per cent of the businesses for collateral to refinance the debt shows the rest of the company, like the Pacific operations, are doing well and are profitable.