Digicel Announces Final Results of Tender Offers; Receives Tenders For 97.10% of 8.250% Notes Due 2022; Receives Tenders For 99.21% of 9.125% Notes Due 2024; Terminates Consent Solicitation For 8.75% Notes Due 2024
KINGSTON, Jamaica, June 22, 2020 /PRNewswire/ -- As part of its deleveraging process Digicel Group Two Limited ("DGL2" and, together with its subsidiaries, "Digicel") reports that it has secured (i) 97.10% support to exchange its US$937.1 million aggregate principal amount of 8.250% Notes due 2022 (the "Existing DGL2 2022 Notes") for new notes with an aggregate principal amount of approximately US$350 million and (ii) 99.21% support to exchange its US$993.0 million aggregate principal amount of 9.125% Senior Cash Pay/PIK Notes due 2024 (the "Existing DGL2 2024 Notes" and, together with the Existing DGL2 2022 Notes, the "Existing Notes") for new notes with an aggregate principal amount of approximately US$250 million.
These exchange offers are part of a more comprehensive deleveraging process by Digicel that will reduce its outstanding debt by approximately US$1.6 billion, to approximately US$5.4 billion, and which has been accepted by the overwhelming majority of its noteholders.
Formal Results of Tender Offers
Digicel announced today the results of its previously announced offers (the "Tender Offers"), subject to the terms and conditions set forth in the confidential offering memorandum dated April 1, 2020, as supplemented by Supplement No. 1 dated April 15, 2020, Supplement No. 2 dated April 24, 2020, Supplement No. 3 dated April 28, 2020, Supplement No. 4 dated May 13, 2020, Supplement No. 5 dated June 1, 2020 and Supplement No. 6 dated June 18, 2020 (the "Offering Memorandum"), to exchange (i) any and all of the outstanding US$937.1 million aggregate principal amount of the Existing DGL2 2022 Notes for (x) up to an aggregate principal amount of approximately US$300 million of newly issued 5.0% Cash Pay/3.0% PIK Notes due 2025 (the "New DGL0.5 Unsecured Notes") to be issued by Digicel Group 0.5 Limited ("DGL0.5") and (y) up to an aggregate principal amount of approximately US$50 million of newly issued 7.00% PIK Perpetual Convertible Notes to be issued by DGL0.5 (the "Convertible Notes" and, together with the New DGL0.5 Unsecured Notes, the "New Notes") and (ii) any and all of the outstanding US$993.0 million aggregate principal amount of the Existing DGL2 2022 Notes for (x) up to an aggregate principal amount of approximately US$100 million of New DGL0.5 Unsecured Notes and (y) up to an aggregate principal amount of approximately US$150 million of Convertible Notes.
The Tender Offers expired at 11:59 p.m., New York City time, on June 19, 2020 (the "Expiration Date"). As of the Expiration Date, Digicel received from holders tenders of US$909,982,994 aggregate principal amount of Existing DGL2 2022 Notes, representing approximately 97.10% of such notes, and US$985,198,349 aggregate principal amount of Existing DGL2 2024 Notes, representing approximately 99.21% of such notes.
Subject to the terms and conditions of the Tender Offers, and as a result of the elections made by holders, as well as the application of the proration and allocation mechanics described in the Offering Memorandum, Digicel will accept for exchange in the Tender Offer (i) for the Existing DGL2 2022 Notes, US$909,982,994 aggregate principal amount of such tendered Existing DGL2 2022 Notes in exchange for (x) US$291,194,499 aggregate principal amount of New DGL0.5 Unsecured Notes and (y) US$48,229,068 aggregate principal amount of Convertible Notes and (ii) for the Existing DGL2 2024 Notes, US$985,198,349 aggregate principal amount of such tendered Existing DGL2 2024 Notes in exchange for (x) US$99,504,797 aggregate principal amount of New DGL0.5 Unsecured Notes and (y) US$148,764,833 aggregate principal amount of Convertible Notes. Digicel will settle all Existing Notes accepted for exchange on the settlement date, which is expected to occur on June 23, 2020.
As previously disclosed in Supplement No. 6 to the Offering Memorandum, given that less than 100% of the Existing DGL2 Notes are tendered in the Tender Offers, DGL0.5 also intends to issue approximately $9.5 million of New DGL0.5 Unsecured Notes and approximately $2.6 million of Convertible Notes on the settlement date to a holding trust (the "Holding Trust") with Conyers Trust Company (Bermuda) Limited as trustee (the "Holding Trustee") (such New Notes, the "Trust Consideration"). The Holding Trustee would then hold the Trust Consideration from the settlement date through September 30, 2020 (the "Holding Period"), in trust, for the benefit of Caribbean Retail Holders that are able to establish that they were retail investors resident in the Caribbean on, and holders of Existing DGL2 Notes that were not tendered into the Tender Offers by, the Expiration Date (such Caribbean Retail Holders, the "Eligible Retail Holders"). The Holding Trustee would pay to each Eligible Retail Holder that provides certain certifications (including, without limitation, with respect to its status as an Eligible Retail Holder) to the Holding Trustee the consideration that such Eligible Retail Holder would have received if such Eligible Retail Holder had tendered its Existing DGL2 Notes in the Tender Offers. Any Trust Consideration that has not been paid to Eligible Retail Holders as of the expiration of the Holding Period would be returned to DGL0.5 and cancelled. However, there is no assurance that the Holding Trust will be established or that any holder will be an Eligible Retail Holder.
Termination of Consent Solicitation
Digicel also announced today the termination of its previously announced solicitation of consents (the "Consent Solicitation") from holders of its outstanding 8.75% Senior Secured Notes due 2024 co-issued by Digicel International Finance Limited ("DIFL") and Digicel Holdings (Bermuda) Limited (the "DIFL Secured Notes"), proposing to effect certain proposed amendments (the "Proposed Amendments") to the indenture governing the DIFL Secured Notes (the "DIFL Secured Indenture") to permit, among other things, the incurrence of additional debt under DIFL's senior credit facility of up to US$100 million.
The Consent Solicitation has been terminated in accordance with the terms and conditions set forth in the consent solicitation statement, dated April 1, 2020, as amended by Amendment No. 1 dated May 27, 2020 (the "Consent Solicitation Statement"), effective as of 5:00 p.m., Eastern time, on June 19, 2020. As a result of the termination, no consent payments will be paid or become payable to holders of the DIFL Secured Notes who have delivered consents. All consents previously delivered and not revoked will be of no effect, and the DIFL Secured Indenture will remain in its present form and will not be amended to effect the Proposed Amendments.
Epiq Corporate Restructuring, LLC ("Epiq") is acting as the tender agent and information agent in connection with the Tender Offers and Consent Solicitations. Questions or requests for assistance related to the Tender Offers and Consent Solicitations and for additional copies of the Offering Memorandum and related letter of transmittal may be directed to Epiq at (646) 282-2500 for banks and brokers and at (866) 897-6433 (Toll-Free) or (646) 282-2500 (International) for all others, or by emailing [email protected].
The New Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
No Offer or Solicitation
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote of approval, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
This press release shall not constitute an offer to purchase any securities or a solicitation of an offer to sell, or the solicitation of tenders or consents with respect to, any securities, and is issued pursuant to Rule 135e under the Securities Act. The Tender Offers and Consent Solicitations were made only pursuant to the Offering Memorandum and related transmittal documents and only to such persons and in such jurisdictions as is permitted under applicable law.
Forward Looking Statements
This press release contains forward-looking statements. Actual results may differ materially from those reflected in the forward-looking statements. We undertake no obligation to release publicly the result of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof, including, without limitation, changes in our business or acquisition strategy or planned capital expenditures, or to reflect the occurrence of unanticipated events.
Digicel Group is a total communications and entertainment provider with operations in 32 markets in the Caribbean, Central America and Asia Pacific. After 18 years of operation, total investment to date stands at over US$7 billion worldwide.
Digicel Group also runs a host of community-based initiatives across its markets and has set up Digicel Foundations in Haiti, Jamaica, Papua New Guinea and Trinidad and Tobago which focus on educational, cultural and social development programmes.
Contact: Antonia Graham Head of PR T: +1-876-564-1708 (Jamaica)