Digicel extends deadline for consent to bond changes
Company building out network upgrade in FijiWednesday, June 10, 2020
DIGICEL has announced an extension of its proposed changes to bonds due for repayment in 2024, as part of its latest attempt to manage its mounting multi-billion US-dollar debt, which has been a struggle, particularly since this year.
The proposed changes will increase Digicel's liabilities by US$100 million, but the Jamaica-based regional telecommunications giant emphasises that this will not affect its efforts to cut its overall US$7-billion debt by US$1.6 billion.
Digicel announced on Monday last (June 8) that it was extending the expiry date to June 19 for bondholders to consent to changes to the agreements governing senior bonds that the company is due to repay in 2024, and which have an interest rate of 8.75 per cent.
The initial deadline was June 5, weeks prior to Digicel filing what many termed to be bankruptcy proceedings before the Bermuda courts. However, Digicel claimed that what it did was to file a proposed scheme of arrangement in the Bermudian courts in connection with Digicel Group One Limited — an intermediate financing holding company.
The scheme, which is said to have the support of more than 97% of bondholders, also involves the appointment of light-touch joint provisional liquidators to oversee the implementation of the scheme.
The company, which operates mobile networks in several regions, including the Caribbean and the Pacific, is moving to cut its overall debt to US$5.4 billion.
PRESSING FORWARD IN FIJI
In spite of its financial challenges, Digicel is pressing forward with its development plans, particularly in Fiji. Information reaching the Business Observer is that Digicel Fiji is far advanced with plans for a major network upgrade costing some US$13.7 million. The network upgrade aims to boost Digitel's LTE coverage across the Fijian Islands.
A lot has already been done to improve LTE coverage in Fiji but this upgrade will add further improvements across that region, with the ultimate aim of providing LTE/4G to even the remotest areas, including the Lau Group, Koro Island, Taveuni and Vanua Levu.
Digicel Fiji has spent approximately US$6.4 million since late 2019 to add capacity to its LTE network. It has also upgraded most of its cell sites in main urban centres to 4.5G LTE-Advanced Pro technology.
Among the reasons cited for the increased LTE coverage has been the massive rise in data traffic demand, which is estimated at about 40% during the recent coronavirus-inspired lockdown.
Digicel Fiji says it has not cut any of its staff during the pandemic, although the company has had to deal with a number of challenges caused by the effect of job losses on disposable income, not least the impact on SKY Pacific, a Digicel-owned pay TV service.
In June 2019 Fiji was reported as having the highest mobile and Internet penetration in the Pacific Islands and was a leading market to watch in terms of both 4G LTE and 5G development in this region.
— DURRANT PATE
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