Digicel files for bankruptcy

Regional telecommunications giant Digicel has filed for bankruptcy before the Bermuda courts, but it insists that its day-to-day operations will not be affected by the filing.

The bankruptcy filing involves the appointment of three provisional liquidators from KPMG, the global services company.

Coming days after the company implemented a group-wide salary reduction, the move is being seen as part of Digicel’s attempt to restructure US$1.6 billion of its estimated US$7 billion debt.

A media statement from Digicel said: “At the start of April, we announced refinancing activities which, when complete, will strengthen our balance sheet by reducing our debt, extending our maturities and reducing our ongoing financing costs.

“Following overwhelming support from our debtholders for these proposals, we are now progressing with the required administrative processes.

“As such, we announced details of a proposed Scheme of Arrangement in the Bermudian Courts in connection with Digicel Group One Limited, which is purely an intermediate financing holding company.

“This Scheme has the support of over 97% of its bondholders and also involves the appointment of a light touch joint provisional liquidators to oversee the implementation of the Scheme.

“It’s important to point out that this will have no impact on our day to day operations, our staff, our suppliers, our customers or any aspect of our ongoing activities – it is business as usual.

“We will provide further updates on this as we progress,” the statement, released May 18 said.