Dig­i­cel debt tar­get may slip as as­set sales drag

The Irish Times - Business - - BUSINESS / NEWS - JOE BREN­NAN

De­nis O’Brien’s telecom­mu­ni­ca­tions group Dig­i­cel has in­di­cated to cred­i­tors that it may not meet its debt bur­den tar­get for the year, as the sale of un­wanted assets drags on, ac­cord­ing to sources.

The group, which has a $6.7 bil­lion (€5.8 bil­lion) debt moun­tain and has op­er­a­tions span­ning 31 mar­kets across the Caribbean and Asia Pa­cific re­gions, had pre­vi­ously forecast that it would lower its debt to 5.7 times earn­ings before in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (ebitda) by the end of its fi­nan­cial year to March 2019. The ra­tio stood at 5.7 times last March.

The guid­ance was premised on Dig­i­cel rais­ing as much as $500 mil­lion on as­set sales and in­creas­ing its full-year ebitda by about 10 per cent on the year to $1.1 bil­lion.

De­lay

How­ever, sources said Dig­i­cel ex­ec­u­tives sig­nalled on a call with an­a­lysts and bond­hold­ers yes­ter­day that there may be a de­lay in de­liv­er­ing the as­set-sales pro­ceeds. A spokesman for the company de­clined to com­ment.

The de­vel­op­ment comes a day after Dig­i­cel re­ported quar­terly fig­ures and as it con­tin­ues talks, which be­gan in Au­gust, to de­lay the re­pay­ment of $3 bil­lion.

The company raised nearly $84 mil­lion on a sale and lease­back deal on 451 Ja­maican mobile phone tow­ers dur­ing the pe­riod. It is also set to gen­er­ate $55 mil­lion on a sim­i­lar sale in­volv­ing a port­fo­lio of South Pa­cific tow­ers by the end of De­cem­ber.

The company, mean­while, is look­ing for in­vestors hold­ing $2 bil­lion of bonds due in Oc­to­ber 2020 to swap their notes for sim­i­lar se­cu­ri­ties that would be due two years later. The group also wants hold­ers of $1 bil­lion of debt that ma­tures in 2022 to ex­change their bonds for new 2024 notes.

Dig­i­cel said on Tues­day that it had ex­tended the dead­line for the swap for a fifth time in just over two months as it con­tin­ued to talk with bond­holder rep­re­sen­ta­tives.

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