Digicel, the Caribbean-based telecommunications and entertainment provider filed for bankruptcy court reorganization while they offered services to more than 20 islands in the region, Central America and Oceania.
The huge telecommunication and entertainment service provider, Digicel was founded in 2001 and has invested more than $6 billion worldwide since it began operating.
Pat Walsh, the spokesperson for the company said on Tuesday that “it was business as usual, and the Chapter 15 filing in New York would not affect operations in the 32 markets that the company serves from its headquarters in Jamaica.”
According to court documents filed last week, 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. The limited liability company is incorporated in Bermuda, and a Chapter 15 bankruptcy filing is requested in part when insolvencies involve assets, debtors and creditors from various countries.
The court documents states that the group’s revenues of $2.3 billion for the year that ended in March, and an operating profit of some $479 million; has been affected by a huge drop in phone revenues as their customers increasingly used data to communicate. The traditionally strong markets like Haiti had reported revenue losses of $47 million while Jamaica was down $31 million recently.
Digicel also reported that its cable television and broadband businesses did not offset the mounting losses in its phone operations. This caused the group to find itself with an unsustainable level of indebtedness.
A hearing in the Chapter 15 bankruptcy case is scheduled for June.
Digicel had announced salary cuts already, in early May they are expected to last until nearly a year due to the financial impact the novel coronavirus pandemic has caused.