Digicel gets 30-day grace period for interest payments on $2.9bn of debt

Telco owned by Denis O’Brien is in discussions with bondholders to refinance a large chunk of its debt

 A Digicel store in Fiji.

A Digicel store in Fiji.

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Denis O’Brien’s telecoms group Digicel will not have to pay interest for a 30-day period on some $2.9 billion of its debt, the company has said.

In a statement, Digicel Group Ltd said it had elected to “take advantage” of the 30-day grace period permitted under agreements with debt holders and would defer making the interest payments on three tranches of its bonds.

Interest was due on two of these bonds on March 30th with the third due on April 1st. The move is seen as a response to the impact of Covid-19 on Digicel’s businesses and its desire to preserve liquidity.

The company said this move arose from its “ongoing constructive and consensual discussions” with some of its largest debtholders at a time when it is in talks on refinancing some of its debts. In total, Digicel has debts fo $6.9 billion.

The bonds impacted are the 8.250 per cent senior notes due in 2022 by Digicel Group One Ltd, the 8.250 per cent senior notes due in 2022 by Digicel Group Two Ltd, and the 9.125 per cent senior cash/payment-in-kind notes due in 2024.

“Digicel continues to engage in constructive discussions with certain debtholders regarding potential transactions involving exchanges of existing debt aimed at reducing Digicel’s leverage, extending its debt maturities and continuing monetisation of its well invested network,” the company said.

Digicel operates in a large number of markets in the Caribbean, central America and the Pacific islands.