Digicel, the telecoms group controlled by businessman Denis O'Brien, is to seek consent from its debtholders for a plan to reduce its debt burden which would involve a write-down of $1.7bn of what is owed.
The company said that despite many years of significant investment in its networks and infrastructure and a solid underlying performance across the 32 markets in which it operates, its current debt levels remain high.
"Digicel has indicated for some time its commitment to reducing its debt to more sustainable levels and the tender offers and consent solicitations are a key step in that process," it said.
If accepted the plan would involve the exchange of debt instruments leading to a reduction in overall debt, extended maturity dates and a reduction in costs.
Should all debtholders participate in full, the company says its outstanding debt would fall from $7bn to $5.3bn.
Annual cash interest payments would be reduce by around $130m and maturity dates would be extended.
If there is agreement to reduce the debt pile to $5.3bn, some of the debtholders would be given new convertible bonds which would covert into a 49% shareholding in the Digicel Group if they have not been redeemed by the firm within three years - an outcome sources consider unlikely.
In a voluntary gesture Mr O'Brien is also putting in $50m of equity as part of the package, comprising $25m in cash and his ownership of the Jamaican HQ of Digicel, worth another $25m.
The company has already begun what it has described as "constructive" negotiations with certain debt holders and has signed agreements with some.
In the case of some of the existing bonds, up to 49% of the holders have already signed up the deal on offer.
Those who accept the tender offer by April 14th will receive a tender premium, with the final deadline set for April 28.
The telco says it is well positioned for continued growth through its ongoing monetisation of its well-invested infrastructure.
$1.3bn of Digicel’s total debt falls due for repayment in April of next year.
Last November, Fitch warned that the telco faced an "imminent refinancing risk" and would likely have to restructure its 2021 bonds.
On Monday Digicel said it had taken advantage of a 30-day grace period allowed under its agreements that enabled it to defer making interest payments on three tranches of bonds, worth a collective $2.9bn.