Telecoms company agreed debt writedown as recently as 2020
Denis O’Brien’s move to endorse a deal with Digicel bondholders that will see him lose control of the telecoms business he founded in 2001 is a significant blow, and caps a battle to manage the company’s debts that has been ongoing for a number of years.
In 2020 it moved to cut its then $7 billion debt pile, and opened negotiations with bondholders. Those talks resulted in creditors taking a $1.6 billion haircut on their investment. In 2015 Digicel called off a planned IPO, citing market conditions. It had been expected use the proceeds of that to repay some of its debt.
Still, Digicel found itself back negotiating with bondholders again this year, as the company grappled with civil unrest in Haiti which decimated one of its most important markets, and had knock-on impacts on its debt. Digicel’s debt is mostly denominated in US dollars, yet it sales are in mostly local currencies of the various nations it operates in. Therefore if those currencies lose value against the dollar, that can further impair Digicel’s ability to pay down its debt.
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