2001: Denis O’Brien establishes mobile telecoms business Digicel in Jamaica. Throughout the 2000s, the fast-moving company expands rapidly throughout the Caribbean, Central America and the Asia-Pacific region, raising funds to invest heavily as it takes advantage of liberalising markets.
2014: By this point, mobile revenue growth is slowing and Digicel is contending with more intense competition in its markets, as other billionaire-led operators elbow it out from opportunities to further expand its footprint. Its debt, standing at $6 billion (€5.6 billion), is denominated in US dollars, while a large chunk of its revenues are in the local currencies of Jamaica, Haiti and Papua New Guinea. As these are weakening against the dollar, Digicel must run just to stand still on its debts.
2015: Digicel calls off a long-mulled initial public offering (IPO) in New York, blaming market volatility. It had been expected to use funds raised through the IPO to repay some of its debt. O’Brien signals that he will try again to float Digicel “within a year”.
2019: In early 2019, Digicel persuades bondholders to accept delayed repayments on $3 billion of bonds. The bondholders have little choice but to do so, as they would recover less of their investment in the event of a company liquidation.
2020: Digicel takes new steps to cut what was at this point a $7 billion debt burden, reopening negotiations with bondholders. In a complex restructuring, creditors subsequently take a $1.6 billion haircut on their investment.
July 2022: It’s goodbye to Papua New Guinea as O’Brien completes the sale of Digicel’s Pacific unit for $1.6 billion (€1.6 billion) to Australian telecoms group Telstra, helping it chip away at its debt pile. But conditions on global debt markets become more unfavourable, while the company remains exposed to currency volatility.
September 2022: Despite the sale, ratings agency Fitch says Digicel’s ability to refinance $925 million of bonds “remains uncertain” without resorting to a “coercive exchange”. The company has “a low margin of safety”, with a default or default-like process “a real possibility”.
November 2022: The company warns that public unrest and economic disruption in Haiti means earnings in one of its key markets will slump. It becomes increasingly apparent that a new reckoning on debt is approaching.
February 2023: Digicel asks investors in $925 million in bonds due for imminent repayment for a 30-day grace period as it continues discussions on further debt restructuring.
March 2023: O’Brien is poised to lose control of Digicel in a new $1.8 billion plan to cut its debt, as bondholders seek a large equity stake in compensation for a reduction in the amount they are owed. A statement from the company says he will “remain actively involved in the business as a director” and retain an equity interest.
