Trinidad Express: May 18, 2020 – Regional telecommunications giant Digicel has filed for bankruptcy before the Bermuda courts, but it insists that its day-to-day operations will not be affected by the move.
Coming days after the company implemented a group-wide salary reduction, the move is being seen as part of Digicel’s attempt to restructure US$1.6 billion of its estimated US$7 billion debt.
Earlier this month, Digicel asked all employees, including managers, to take a temporary salary reduction due to the financial losses caused by the COVID-19 pandemic.
“Managers at the highest salary tiers will get a 20 percent cut, while employees at lower salary tiers will be asked to take a five percent reduction. The chairman and all non-executive directors will waive their entire salaries for the first quarter of the fiscal year,” Digicel said in a statement on the issue.
It said staff on an annual salary of US$10 000 or less would not be affected by the decision.
The salary cuts took effect from May 1 and will last for the next 11 months.
Meanwhile, Digicel, said: “This will have no impact on our day to day operations, our staff, our suppliers, our customers or any aspect of our ongoing activities – it is business as usual.”
A statement issued by the company yesterday said: “At the start of April, we announced refinancing activities which, when complete, will strengthen our balance sheet by reducing our debt, extending our maturities and reducing our ongoing financing costs.
“Following overwhelming support from our debtholders for these proposals, we are now progressing with the required administrative processes.
“As such, we announced details of a proposed Scheme of Arrangement in the Bermudian Courts in connection with Digicel Group One Limited, which is purely an intermediate financing holding company.
“This Scheme has the support of over 97% of its bondholders and also involves the appointment of a light touch joint provisional liquidators to oversee the implementation of the Scheme.
“It’s important to point out that this will have no impact on our day to day operations, our staff, our suppliers, our customers or any aspect of our ongoing activities – it is business as usual. We will provide further updates on this as we progress.”
- Top Feature Photo: Denis O’Brien, Digicel Chairman