Digicel completes $3.8 billion cross-border consensual restructuring

Davis Polk advised Digicel Limited, Digicel International Finance Limited and certain affiliated entities (collectively, “Digicel”) in connection with a consensual cross-border restructuring of approximately $3.8 billion of Digicel’s indebtedness, which closed on January 29, 2024. The restructuring, which was implemented through two consolidated schemes of arrangement in Bermuda and recognition proceedings in the United States, was previously sanctioned by the Supreme Court of Bermuda on November 6, 2023, and subsequently recognized in the United States under chapter 15 of the U.S. Bankruptcy Code on November 9, 2023, in a jointly administered proceeding before the United States Bankruptcy Court for the Southern District of New York.

As a result of the restructuring, Digicel equitized approximately $1.7 billion of indebtedness and reduced its cash interest expense by approximately $120 million. In connection with the restructuring, Digicel issued (i) new senior secured first-lien notes in an aggregate principal amount of approximately $1.2 billion, (ii) a new senior secured first-lien term loan facility in an aggregate principal amount of approximately $1 billion and (iii) new senior unsecured notes in an aggregate principal amount of approximately $419 million. Digicel also conducted an approximately $85 million fully subscribed equity rights offering as part of the restructuring. The effectiveness of the Bermuda schemes marks the final step of a comprehensive restructuring, which also included the approximately $1.2 billion cross-border restructuring of Digicel’s former parent company, Digicel Group Holdings Limited, that was consummated on November 14, 2023.

Enabling customers to live, work, play and flourish in a connected world, Digicel’s world class LTE and fiber networks deliver state-of-the-art mobile, home and business solutions. The company serves 10 million consumer and business customers in 25 markets in the Caribbean and Central America, and its investments of over $5 billion and a commitment to its communities through its Digicel Foundations in Haiti, Jamaica and Trinidad & Tobago have contributed to positive outcomes for over two million people to date.

The Davis Polk restructuring team included partners Timothy Graulich and Darren S. Klein, counsel Stephen D. Piraino and Robert (Bodie) Stewart and associates Richard J. Steinberg, Amber Leary, Kate Fine and Kayleigh Yerdon. The capital markets team included partner Michael Kaplan and counsel Joseph S. Payne. The finance team included partner Hilary Dengel and counsel David J. Kennedy. Corporate advice was provided by partner Daniel Brass. The tax team included partner Lucy W. Farr and counsel Tracy L. Matlock. Members of the Davis Polk team are based in the New York office.