Digicel receives U.S. court recognition of Bermuda proceedings

By Sarah Lizee

Olympia, Wash., Oct. 26 – Digicel Group Holdings Ltd. received recognition from the U.S. Bankruptcy Court for the Southern District of New York of its Bermuda proceedings, according to an order filed Thursday.

The company said it has negotiated a scheme with overwhelming creditor support, as previously reported.

On May 28, 2023, the debtor and some of its affiliates entered into a restructuring support agreement with creditors holding about 83% of the company’s $400 million 8% senior cash pay/PIK notes due 2025 and 85% of its $200 million 7% PIK subordinated convertible notes by value, which is above the 75% threshold required under Bermuda law to sanction a scheme of arrangement.

The consenting creditors have agreed to support and vote in favor of the scheme.

The purpose of the scheme is to distribute the debtor’s assets through a compromise of the debtor’s unsecured notes and subordinated convertible notes in exchange for the following series of new notes:

• $110.4 million of new 1A and new 2A notes issued to unsecured noteholders;

• $248.7 million of new 1B and new 2B notes issued to unsecured noteholders;

• $4.7 million of new 3A and new 4A notes issued to subordinated noteholders; and

• $213.1 million of new 3B and new 4B notes to be issued to subordinated noteholders.

The amounts of the new notes being issued assumed an election deadline of Oct. 12.

The existing notes be fully canceled and released in exchange for the consideration:

• In the case of the unsecured notes, $163.5 million in cash (including amounts distributed through an interim distribution made in June and subject to certain holdbacks); and a choice between (a) new 1A notes and 1B notes, and (b) new 2A notes and 2B notes; and

• In the case of the subordinated notes (subject to certain holdbacks) $19.5 million in cash, and a choice between (a) new 3A notes and new 3B notes and (b) new 4A notes and new 4B notes to be issued by the debtor.

Holders of the existing notes will be permitted to elect the specific series of new senior notes or new subordinated notes, as applicable, they would like to receive under the scheme.

Participation will be open to all holders of the existing notes on a ratable basis.

The election opened on Sept. 8 and closed at 5 p.m. ET on Oct. 12.

Receiving U.S. court recognition was a condition precedent to the effectiveness of the scheme.

Digicel, based in Kingston, Jamaica, is a Caribbean mobile phone network and home entertainment provider. Digicel Group Holdings is a non-operating holding company within the Digicel group. The Chapter 15 filing was made under case number 23-11479 on Sept. 11.

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