Digicel Group One reduces debt by $1.6 billion
Telecommunication service provider, Digicel Group One Limited, has announced that it has reduced its $7 billion debt by $1.6 billion.
The announcement was made by the Group on CISION PR Newswire last week.
According to the statement, it states that Digicel as a leading communications and entertainment provider with a standout brand, exceptional people and strong market positions across 32 markets in the Caribbean, Central America and Asia Pacific announces that Digicel Group One Limited's ("DGL1") scheme of arrangement (the "Scheme") is effective.
It highlighted that the announcement marks the conclusion of the last significant milestone in the comprehensive debt reduction process that Digicel announced on April 1, 2020 which followed extensive prior engagement with a number of large bondholders.
“The debt reduction process is expected to be complete next week following consummation of the previously announced offers to exchange existing debt of Digicel Group Two Limited for various new securities,” reads the statement.
It also added that the effective completion of the Scheme follows overwhelming stakeholder support for the debt reduction process, including the sanctioning of the Scheme by the Bermuda Supreme Court on June 8, 2020.
And also it marks the entry of an order by a federal United States court on June 17, 2020 recognizing DGL1's proceedings in Bermuda and giving full force and effect to the Scheme in the United States.
The comprehensive debt reduction process leaves Digicel well positioned for future growth.
The key outcomes of the debt reduction measures include: reducing debt by approximately $1.6 billion to approximately $5.4 billion; reducing annual cash interest costs by $125 million; extending key debt maturities; and enhancing liquidity and operational flexibility for continued growth and monetization of Digicel's well-invested infrastructure.
The Chairman of Digicel, Denis O'Brien, said that they are very grateful for the support of its bondholders and other stakeholders in delivering a transformative outcome that underpins our ability to further enhance our services to our 13 million customers across 32 markets.
"To date, Digicel has invested over $7 billion providing state of the art infrastructure in 32 markets, including over $2.2 billion of this over the past five years.
“Our journey and investment encompassed a wide range of emerging markets some of which had little or no telecommunications infrastructure prior to Digicel commencing operations.
“In other markets we drove competition and services to challenge dominant incumbents, reducing prices and delivering fast-track high speed services. Our next phase will be as a digital lifestyle partner across all our markets."
The Chief Executive Officer of Digicel, Jean Yves Charlier added that whilst the deleveraging process has been underway over recent months the day to day job of providing exceptional services, planning for the future and managing the human and logistical challenges posed by COVID-19, is being progressed by our exceptional teams, colleagues and partners across our 32 markets.
“I could not be more proud of what has been achieved and I applaud your work for our great business but also for the communities in which you live and work."
"In light of the severe impact that COVID-19 has had on the global economy and in many of our markets, we anticipate a continuing impact on our revenue, at least through the remainder of calendar 2020.
“We have implemented significant measures to help us mitigate a portion of the revenue impact through new cost savings initiatives and I would like to acknowledge our staff for agreeing to accept pay reductions during this period and similarly our Board, for agreeing to suspend a proportion of their remuneration and fees for the year."
He also added that COVID-19's impact has been both positive and negative.
“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, [small medium enterprises] SME's and Governments in our Business Solutions segment. Year-over-Year, on a reported basis, we expect Service Revenues to be down by a high single-digit percentage in the first quarter of FY21.
"Our Caribbean markets, including Jamaica and Trinidad have been most impacted by COVID-19 while Haiti and the Pacific markets, including Papua New Guinea have been the most resilient.
"The last number of months have also seen us partnering with Governments across our markets to ensure that people can stay connected as they work, learn and interact from home due to social distancing.”
Mr. Charlier also added that in line with their #therewithyou promise to customers, their support has included zero rating of Government and educational websites so that people can access them without using their data allotments.
“Partnering on and delivering a host of e-learning initiatives; providing toll free Government hot lines; providing free or discounted services to vulnerable and disadvantaged students; donating devices and connectivity services to frontline workers; and offering COVID-19 digital tracing and digital curfew management tools to Governments."