Digicel proposes scheme and “light-touch” provisional liquidators

Chicago, April 28 – Digicel Ltd. is now working through the administrative processes necessary to implement proposals to reduce its debt and financing costs and extend its debt maturities, following debtholder support for the proposals announced on April 1, according to a press release.

To that end, Digicel Group One Ltd. has issued a practice statement letter in order to propose a scheme of arrangement.

The practice statement letter has been sent to Depository Trust Co. as the holder of Digicel Group One's existing 8¼% senior notes due 2022 and is being transmitted to beneficial owners of the existing notes by Epiq Corporate Restructuring, LLC, the tender agent.

If sanctioned, the scheme would effect a substantial deleveraging of the company.

According to the proposed scheme, to ensure a seamless transition, "light-touch" joint provisional liquidators would be appointed to oversee the scheme and the company's board of directors, who will remain in situ throughout. The process would have no impact on Digicel's day-to-day operations, on its staff, its suppliers, its customers or any aspect of its ongoing activities.

The company intends to apply to the Supreme Court of Bermuda to seek an order convening a single meeting of the scheme creditors for the purpose of voting on the scheme.

This scheme is the next step in the implementation of the company's comprehensive restructuring plan, which was first announced on April 1 when Digicel Group 0.5 Ltd. (a newly formed holding company that will own all of the Company's current subsidiaries and other assets and assume its liabilities upon consummation of the scheme) commenced a tender offer to, among other things, exchange all of the existing notes for up to an aggregate principal amount of $941 million of newly issued secured notes due 2024 to be issued by the new holding company.

As of the date of this press release, the tender offer has received support from 98% in aggregate principal amount from noteholders of the existing notes, based on tender receipts.

Tenders of the notes were also an approval of a proxy, to take all steps necessary and execute all documentation necessary to irrevocably vote in favor of the scheme.

A person holding the ultimate economic and beneficial interest in the existing notes will be a scheme creditor for the purposes of the scheme. As and when the scheme becomes effective, the scheme creditors, amongst others, will be bound by the terms of the scheme, regardless of whether they voted in favor of the scheme (or at all).

The Court will only approve the terms and conditions of the scheme after conducting a hearing upon the fairness of its terms and conditions, at which scheme creditors will have the right to appear, and if the scheme is approved by scheme creditors comprising at least a majority in number and holding at least 75% by value of the existing notes present and voting, whether in person or by proxy, at the scheme meeting.

The Company anticipates that a directions hearing will be held on May 12 at 2:30 p.m. ET at the Bermuda Supreme Court, Civil/Commercial Division.

Scheme creditors will be notified in advance if there is a change to the proposed date of the convening hearing. At the convening hearing, the court will be asked to give directions as to the convening of the scheme meeting.

The appointment of "light-touch" joint provisional liquidators, previously mentioned above, will allow the company to, among other things, obtain the benefit of a moratorium, which will limit creditors' ability to pursue claims against the company and enforce over its assets without court approval.

Further details in relation to the scheme are contained in the practice statement letter. Questions in relation to the practice statement letter may be directed by scheme creditors to the information agent, Epiq Corporate Restructuring, LLC.

Based in Kingston, Jamaica, Digicel is a telecommunications and entertainment provider with operations in the Caribbean, Central America and Asia Pacific.

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