Denis O’Brien hands over majority control as Digicel debt swap formalised

The consortium – led by PGIM, Contrarian Capital Management and GoldenTree Asset Management – took the controlling stake in the company after a consensual process.

Mr O’Brien, who backed the scheme after Digicel’s debt-servicing obligations hit an unsustainable level last year, retains a 10pc stake in the business and a seat on the new nine-member board of directors. His holding could increase to 20pc based on options under the terms of the debt deal.

Last year, Digicel announced the telecoms entrepreneur, who founded the company in Jamaica in 2001, had agreed to cede his majority stake in the business in return for a debt write-down totalling $1.7bn (€1.6bn).

Crucially, in terms of cash flow the complex set of transactions has ultimately resulted in a $120m a year reduction in Digicel’s debt servicing costs. The move will also see the company raise $110m via a rights issue.

Digicel had for years been struggling to tackle the debt, which at one stage hit a peak of $7bn. The company completed a previous debt restructuring in 2020, which saw bondholders write off $1.6bn and Mr O’Brien inject $50m to retain his ownership.

The latest restructuring was formally implemented on Monday through a bond exchange offer, Bermuda schemes of arrangement and an associated US recognition proceeding, the group said. Digicel interim group CEO Maarten Boute said it represented “good news today for our customers, our communities and all our staff with Digicel on a more solid financial footing enabling it to maintain and increase its long-standing commitments to the region”.

Mr O’Brien is standing down as chair of Digicel as part of the restructuring, handing over to Rajeev Suri, a former CEO of global mobile telecoms operator Inmarsat, and before that Nokia.

The Irish businessman who founded Digicel after selling his Esat Digifone business in Ireland more than two decades ago has indicated he doesn’t plan on taking on a new full-time role after the restructuring has concluded.

He retains significant investments in Ireland, Spain and Portugal.

Digicel now has around 10 million consumer and business customers in 25 markets in the Caribbean and Central America. The group sold its former Digicel Pacific arm, which has operations in markets including Papua New Guinea and Fiji, to Australia’s Telstra in 2021.