We are advising Digicel in connection with the restructuring

Davis Polk is advising Digicel Group Holdings Limited (“DGHL”) and Digicel Limited (“DL” and together with certain of its subsidiaries, the “Company”) in connection with the cross-border restructuring of more than $4.4 billion of indebtedness.

On May 28, 2023, DGHL, its shareholder (the “Shareholder”), an ad hoc group of DGHL noteholders (the “DGHL AHG”) and an ad hoc group of crossover holders (the “Crossover AHG”) entered into a restructuring support agreement (the “DGHL RSA”). The DGHL AHG and Crossover AHG collectively hold over 80% of the face amount of DGHL’s approximately $640 million of outstanding notes. Among other things, the DGHL RSA contemplates that existing noteholders will receive, in full and final satisfaction of their claims, approximately $183 million in cash and new secured limited recourse notes in respect of, among other things, certain future distributions, which will be consummated through a Bermuda scheme of arrangement and a U.S. chapter 15 recognition proceeding.

On June 27, 2023, the (i) Company, (ii) Crossover AHG, (iii) an ad hoc group of Digicel International Finance Limited (“DIFL”) secured lenders and noteholders (the “DIFL Secured AHG” and, together with the Crossover AHG, the “AHGs”) and (iiii) the Shareholder entered into a restructuring support agreement (the “DL/DIFL RSA”). Together, the AHGs hold more than 78% of all of the Company’s funded indebtedness. The DL/DIFL RSA provides a pathway for the Company to implement a comprehensive financial recapitalization that would, together with the DGHL Restructuring, reduce DGHL’s and the Company’s consolidated funded debt by approximately $1.7 billion and annual cash interest expense by approximately $120 million. The restructuring contemplated in the DL/DIFL RSA is expected to equitize 100% of DL’s senior notes (the “DL Notes”) and DIFL’s subordinated notes (the “DIFL Subordinated Notes”) as well as refinance and extend the maturity of the Company’s other funded indebtedness. The DL/DIFL RSA contemplates that the Company will implement its restructuring through an exchange offer for the DIFL Subordinated Notes, Bermuda schemes of arrangement and U.S. chapter 15 recognition proceedings.

In addition, DIFL and certain of its subsidiaries have agreed with the AHGs to amend DIFL’s term loan B credit agreement to allow for an aggregate principal amount of $60 million of incremental DIFL term loan Bs, to be provided by the Crossover AHG. Additionally, the Crossover AHG has agreed to backstop a new-money equity rights offering of up to $110 million, which all holders of DL Notes and DIFL Subordinated Notes will have the opportunity to participate in.

As a Digital Operator, Digicel is in the business of delivering powerful digital experiences 1440 minutes of each day to customers. Through its world-class LTE and fibre networks, together with its suite of apps spanning sports, news, local radio and podcasts and self-care, Digicel is the only operator in its markets that can deliver that. Serving consumer and business customers in 25 markets in the Caribbean and Central America, 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 includes partners Timothy Graulich and Darren S. Klein, counsel Stephen D. Piraino and associates Richard J. Steinberg, Matthew B. Masaro and Kayleigh Yerdon. The capital markets team includes partner Michael Kaplan, counsel Joseph S. Payne and associate Dennis Chu. The finance team includes partner Hilary Dengel, counsel David J. Kennedy and associate Theodore N. Batis. The litigation team includes partner James I. McClammy, counsel Marc J. Tobak and associate Garret Cardillo. All members of the Davis Polk team are based in the New York office.