Telecoms giant Digicel has agreed to yield a 62 per cent stake to bondholders in debt-to-equity exchange that comes in the wake of the company’s restructuring.

This, according to a report from the Irish Times, which indicated that Digicel will see its debt cut by US$1.7 million or 1.55 billion euros in the debt write-off. The company will also see annual interest payments reduced by US$120 million.

As a result of the restructuring, founder and Chairman Denis O’Brien’s shareholding in the company will be reduced to 10 per cent, as previously reported by the Jamaica Observer. Notwithstanding, he will still have a seat on the Digicel board.

According to the Irish Times, O’brien has invested 5 billion euros in the company over the last two decades and extracted $1.9 billion in dividends between 2007 and 2015.

Headquartered in Jamaica, Digicel provides telecoms and money services across the Caribbean. The restructuring of the company under a scheme of arrangement is, however, taking place in Bermuda under Chapter 15 US Bankruptcy protection.

“This agreement is a very positive step for the future sustainability of our business and, on behalf of the company, I want to thank our debtholders for their support and constructive stance,” the Irish Times quotes Digicel Chief Executive Officer Oliver Coughlan.

“The fundamentals of our business remain strong, thanks to our dedicated and loyal staff, customers and vendors across our 25 markets in the Caribbean and Central America,” it continued.

Coughlan confirmed that the restructuring is set to be completed before the end of the year and, “it will continue to be business as usual during the implementation phase”.

In the meantime, bondholders could increase their stake in Digicel as they will be allowed to participate in a US$110-million rights issue, based on the deal struck in Bermuda.

The group of bondholders, which are set to take majority interest in Digicel, includes investment firms PGIM, Golden Tree Asset Management and Contrarian Capital Management.