The group was majority acquired by three investment companies based in the United States. Digicel’s foreign investors include PGIM, led by principal Gregory Cass; GoldenTree by his partner Pat Dyson; and Contrarian Capital Management by Managing Director Xiao Song.
Ratings agency Fitch will stop assessing Digicel’s debt levels following the reorganization of the telecommunications sector, including the arrival of a new chairman and CEO, and a change in control of property.
Digicel Group Limited, an internet, cable and telephone service provider in 30 markets, was recently bought out by its creditors after failing to honor its debts. Founder and former chairman Denis O’Brien became a minority shareholder as part of the restructuring and relinquished the chairmanship, but remains a board member.
“These actions follow the group’s announcement on January 29 of the finalization of its consensual restructuring plan. Fitch withdrew ratings for commercial reasons“, the rating agency said on Tuesday about its decision.
“Following the withdrawal of Digicel’s ratings, Fitch will no longer provide associated environmental and social (ESG) relevance scores,” it said.
Digicel had debt of $4.7 billion at the time of the restructuring, but the agreement with its creditors reduced those obligations to $3 billion.
In January, three private equity firms acquired majority control of the Digicel Group and appointed tech guru Rajeev Suri as chairman.
Foreign investors are PGIM, led by the principal Gregory Cass ; GoldenTree by its partner Pat Dyson ; and Contrarian Capital Management by the Managing Director Xiao Song.
Investors were once bondholders who converted the funds owed to them into stocks. In Jamaica, some small investors who hold Digicel bonds, through financial institutions, have complained of getting fractions back on the dollar. They also did not have the opportunity to invest as shareholders.
Fitch estimated in December that the debt reduction would reduce Digicel’s gearing from 8.5 times core earnings to 5.4 times, based on projections that the group would make a profit of $550 million. before interest taxes, depreciation and amortization in 2024.
Fitch Ratings has withdrawn the default ratings of Digicel International Finance Limited, Digicel Group Holdings Limited and Digicel Limited; the ratings of DGHL’s senior unsecured notes and subordinated notes, which were rated “C”/”RR4” and “C”/”RR6”, respectively, prior to the withdrawal; and the ratings of DIFL’s Subordinated Notes, Unsecured Notes, Secured Notes and Term Loan B Facility due 2024, which were rated “C”/”RR6”, “C”/”RR4” and “C”/“RR4”, respectively. DIFL, DGHL and Digicel Limited were rated ‘RD’ before the withdrawal.
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