Digicel unit unveils plan to tap lenders for $550m

DIGICEL has announced its intention to borrow $550m (€486m) though a private placement of senior secured notes in a move set to up the overall debt level at Denis O’Brien’s telecoms group.

However, it is understood the bulk of the proceeds will go to refinancing existing debt – including repayment of a revolving credit facility and of a share of the group’s current term loan A.

It follows the company’s securing of consent from lenders to amend a debtto-earnings covenant and its outlining of refinancing plans on an investor call last week. The plan is to repay a drawn revolving credit facility understood to stand at $100m, and a portion of the company’s outstanding $300m term loan. Any remaining net proceeds will be used for general corporate purposes.

Last week, Digicel Group reported $554m (€487m) of revenue for the third fiscal quarter to investors, down 4pc year-over-year. Ebitda was $241m – down 2pc.

Digicel does not publish quarterly financial results; however, it provides regular financial updates to bond investors and lenders.

Its total debt pile is around $6.8bn. The latest Digicel results showed a net leverage to ebitda ratio of 6.8 times. That suggests a slower pace of debt reduction than forecast, which is understood to reflect a slower pace of disposals.