Durrant Pate/Contributor

Jamaica-based regional telecoms giant, Digicel Group, is undergoing leadership changes as it moves towards completing a debt-restructuring deal with bondholders. 

Digicel group chief executive officer, Oliver Coughlan, is to step down from the role in December with incumbent chief operating officer, Maarten Boute, taking up the role on an interim basis.

Digicel founder, Denis O’Brien has disclosed that he will be announcing his successor as chairman in the “coming weeks” at the end of a debt-restructuring process that will reduce his equity shareholding to about 10 per cent and see a group of bondholders take control of the group. 

“However, I will remain as a director and shareholder of the company,” O’Brien told investors in a note circulated to announce the leadership changes. Coughlan had been due to retire at the end of 2022 but remained in position to help oversee the restructuring process, reported the Irish Times. 

O’Brien hailed Coughlan for job well done

He has been with Digicel for more than nine years, running its Pacific business before taking the helm of its Caribbean and Central America markets. In praising Coughlan, O’Brien said he demonstrated a “calm, capable and friendly demeanour” that had allowed the business to “flourish and grow” despite the challenges it faced.

According to the Digicel founder, “there is no doubt that Oliver has done a terrific job. Under his leadership, we were able to launch our digital operator strategy, divest the Pacific arm… in a sale to Telstra, navigate the COVID-19 pandemic and return the business to growth.”

Boute has been with Digicel for the past 14 years, working as chief operating officer for the past eight months. “As Maarten steps into this interim role, I have every confidence in his ability to successfully lead the company during this time,” O’Brien also told investors.

Update on restructuring

The current restructuring, which will see US$1.7 billion (€1.6 billion) of debt written off and a group of bondholders take control of the group, is Digicel’s third attempt to overhaul its borrowings in the past five years. It is on track to reduce company debt to US$3.12 billion, compared to a peak of over US$7 billion in early 2019.

Under the restructuring plan, O’Brien’s equity stake will fall to 10 per cent although he will also receive warrants that will allow him to purchase, within six years, the equivalent of a further 10 per cent of the amount of shares outstanding when the restructuring is completed.

The price at which the warrants can be converted into shares will be based off an equity value target of US$1.1 billion for Digicel. 

A valuation calculation used by debt ratings agency Fitch suggests that the company will have an initial equity value of about $375 million after the debt overhaul.