SAN JUAN, Puerto Rico (AP) — Digicel, a Caribbean-based telecommunications and entertainment provider that services more than 20 islands in the region as well as Central America and Oceania, has filed for bankruptcy court reorganization.
A spokesman for Digicel said Tuesday that the Chapter 15 filing in New York would not affect operations in the 32 markets that the company serves from its headquarters in Jamaica.
“It is business as usual,” Pat Walsh said in a statement.
Digicel Group One Limited has about $7.4 billion in outstanding debt and is seeking to restructure nearly $2 billion as part of an agreement with shareholders, according to court documents filed last week. While the limited liability company is incorporated in Bermuda, a Chapter 15 bankruptcy filing is sought in part when insolvencies involve assets, creditors and debtors from various countries.
Court documents state that the group’s revenues were $2.3 billion for the year that ended in March, with an operating profit of some $479 million. The company said it has been affected by a significant drop in phone revenues as customers increasingly turn to data usage, with traditionally strong markets like Haiti reporting revenue losses of $47 million and Jamaica down $31 million.
Digicel said its cable television and broadband businesses have not offset mounting losses in its phone operations.
“As a result, the group finds itself with unsustainable levels of indebtedness,” the company said.
Digicel already had announced salary cuts in early May that are expected to last nearly a year as a result of the financial impact caused by the coronavirus pandemic.
A hearing in the Chapter 15 bankruptcy case is scheduled for June.
Digicel was founded in 2001 and has invested more than $6 billion worldwide since it began operating.
Associated Press researcher Jennifer Farrar in New York contributed to this report.