Digicel Group Limited Announces Amended Exchange Offers and Consent Solicitations

KINGSTON, Jamaica--(BUSINESS WIRE)--Following constructive discussions with a group of noteholders regarding the previously announced exchange offers and consent solicitations, Digicel Group Limited (“Digicel”) today announced that it, together with Digicel Group One Limited, an indirect subsidiary of Digicel (“DGL1”), and Digicel Group Two Limited, a direct subsidiary of Digicel and the parent of DGL1 (“DGL2” and, together with Digicel and DGL1, the “DGL Companies”), has amended the terms of their previously announced exchange offers, subject to the terms and conditions set forth in a confidential offering memorandum dated August 31, 2018, as supplemented by Supplement No. 1 dated September 7, 2018 and Supplement No. 2 dated December 3, 2018 (the “Offering Memorandum”). Pursuant to the amended offers (the “Exchange Offers”), the DGL Companies are offering to exchange (x) in the Phase I 2020 Notes Exchange Offer (as defined below), the outstanding 8.250% Notes due 2020 of Digicel (the “Existing 2020 Notes”) for up to $580,000,000 of newly issued 8.250% Senior Secured Notes due 2022 of DGL1 (the “New DGL1 2022 Notes”) (subject to increase in the DGL Companies’ sole discretion up to $1,000,000,000 if requisite consents are obtained (the “DGL1 2022 Notes Phase I Exchange Cap”)), (y) in the Phase II 2020 Notes Exchange Offer (as defined below), any and all of the Existing 2020 Notes for up to (1) $1,000,000,000 minus the aggregate principal amount of New DGL1 2022 Notes issued in the Phase I 2020 Notes Exchange Offer (the “DGL1 2022 Notes Phase II Exchange Cap”) of New DGL1 2022 Notes or (2) $1,000,000,000 (the “DGL2 2022 Notes Phase II Exchange Cap”) of newly issued 8.250% Senior Notes due 2022 of DGL2 (the “New DGL2 2022 Notes”) and (z) in the Phase II 2022 Notes Exchange Offer (as defined below), any and all of the outstanding 7.125% Notes due 2022 of Digicel (the “Existing 2022 Notes” and, together with the Existing 2020 Notes, the “Existing DGL Notes”) for newly issued 9.125% Senior Cash Pay/PIK Notes due 2024 of Digicel (the “New 2024 Notes” and, together with the New DGL1 2022 Notes and the New DGL2 2022 Notes, the “New Notes”) (provided that if requisite consents are obtained, the New 2024 Notes will be issued by DGL2). Cash interest on the New 2024 Notes will accrue at a rate of 7.125% and PIK interest on the New 2024 Notes will accrue at a rate of 2.000%. For each $1,000 principal amount of Existing DGL Notes tendered into the Exchange Offers prior to the Expiration Date (as defined below), Eligible Holders will be eligible to receive $1,000 principal amount of New Notes, as described below. The purpose of the Exchange Offers is to extend the maturity date of certain of our near-term maturities.

Digicel is also soliciting consents (the “Consent Solicitations”), upon the terms and conditions set forth in the Offering Memorandum, (i) from holders of the Existing 2020 Notes to adopt certain proposed amendments to the indenture (the “Existing 2020 Indenture”) under which the Existing 2020 Notes were issued and (ii) from holders of the Existing 2022 Notes to adopt certain proposed amendments to the indenture (the “Existing 2022 Indenture” and, together with the Existing 2020 Indenture, the “Existing DGL Indentures”) under which the Existing 2022 Notes were issued. The proposed amendments would eliminate substantially all of the restrictive covenants and events of default contained in each Existing DGL Indenture (the “Proposed Amendments”). Adoption of the Proposed Amendments with respect to a series of Existing DGL Notes requires the receipt of consents from holders of a majority of the outstanding aggregate principal amount of the applicable series of Existing DGL Notes.

Digicel’s obligation to accept for exchange any series of Existing DGL Notes validly tendered (and not validly withdrawn) in the Exchange Offers is subject to certain conditions (which may be waived) set forth in the Offering Memorandum, which include, for the Phase II 2020 Notes Exchange Offer, a minimum of $1,800,000,000 in aggregate principal amount of Existing 2020 Notes being validly tendered at or prior to the Expiration Date in the Phase I 2020 Notes Exchange Offer and the Phase II 2020 Notes Exchange Offer, collectively, and accepted in the applicable Exchange Offer, and for the Phase II 2022 Notes Exchange Offer, a minimum of $900,000,000 in aggregate principal amount of Existing 2022 Notes being validly tendered at or prior to the Expiration Date and accepted in the Phase II 2022 Notes Exchange Offer. No Exchange Offer is conditioned on the consummation of any other Exchange Offer or on obtaining requisite consents from holders of a majority of the outstanding aggregate principal amount of the applicable series of Existing DGL Notes.

The Phase I 2020 Notes Exchange Offer will expire at 11:59 p.m., New York City time, on December 18, 2018, and the Phase II 2020 Notes Exchange Offer and the Phase II 2022 Notes Exchange Offer will expire at 11:59 p.m., New York City time, on December 21, 2018, in each case, unless extended (such date and time with respect to an Exchange Offer, as the same may be extended for such Exchange Offer, the “Expiration Date”).

The following table sets forth the Exchange Consideration for each series of Existing DGL Notes validly tendered (and not validly withdrawn) and accepted for exchange in the Exchange Offer:

Title of Exchange Offer	Existing DGL Notes to be Exchanged	CUSIP / ISIN Numbers	Aggregate Principal Amount Outstanding	Maximum Exchange Amount	Exchange Consideration^(1)(2)
Phase I 2020 Notes Exchange Offer (the “Phase I 2020 Notes Exchange Offer”)	Existing 2020 Notes	25380WAE6 / US25380WAE66; G27631AD5 / USG27631AD56	$2,000,000,000	$580,000,000 (subject to increase in our sole discretion up to $1,000,000,000 if requisite consents are obtained)	$1,000 principal amount of the New DGL1 2022 Notes
Phase II 2020 Notes Exchange Offer (the “Phase II 2020 Notes Exchange Offer” and, together with the Phase I 2020 Notes Exchange Offer, the “2020 Notes Exchange Offers”)	Existing 2020 Notes	25380WAE6 / US25380WAE6; G27631AD5 / USG27631AD56	$2,000,000,000	$2,000,000,000 minus the aggregate principal amount of New DGL1 2022 Notes issued in the Phase I 2020 Notes Exchange Offer	Option (subject to the proration and allocation mechanics described below) of each Eligible Holder of Existing 2020 Notes tendering its Existing 2020 Notes in the Phase II 2020 Notes Exchange Offer: $1,000 principal amount of (i) up to $1,000,000,000 minus the aggregate principal amount of New DGL1 2022 Notes issued in the Phase I 2020 Notes Exchange Offer of New DGL1 2022 Notes or (ii) up to $1,000,000,000 of New DGL2 2022 Notes
Phase II 2022 Notes Exchange Offer (the “Phase II 2022 Notes Exchange Offer”)	Existing 2022 Notes	25380WAF3 / US25380WAF32; G27631AF0 / USG27631AF05	$1,000,000,000	N/A	$1,000 principal amount of the New 2024 Notes (provided that if requisite consents are obtained, the New 2024 Notes will be issued by DGL2)

(1)	For each $1,000 principal amount of the Existing 2020 Notes or the Existing 2022 Notes, as applicable.
(2)	No payment will be made in respect of accrued interest on Existing DGL Notes accepted in the Exchange Offers, but cash interest will accrue on each series of New Notes from the most recent date to which interest was paid on the applicable series of Existing DGL Notes. PIK interest on the New 2024 Notes will only accrue from the Settlement Date (as defined below).

Each Eligible Holder of Existing 2020 Notes will be required to elect (subject to the proration and allocation mechanics as described below and in the Offering Memorandum and the related letter of transmittal) whether it wishes to tender its Existing 2020 Notes in the Phase I 2020 Notes Exchange Offer, the Phase II 2020 Notes Exchange Offer, or both 2020 Notes Exchange Offers. Unless specifically indicated otherwise in the letter of transmittal, Eligible Holders who tender their Existing 2020 Notes in the Exchange Offers will be deemed to have tendered their Existing 2020 Notes into both 2020 Notes Exchange Offers and will be deemed to have elected to receive New DGL1 2022 Notes as the form of Exchange Consideration in the Phase II 2020 Notes Exchange Offer (subject to the proration and allocation mechanics as described below).

If acceptance of all Existing 2020 Notes that are properly tendered (and not validly withdrawn) in the Phase I 2020 Notes Exchange Offer would require DGL1 to issue New DGL1 2022 Notes pursuant to the Phase I 2020 Notes Exchange Offer in an amount that would exceed the DGL1 2022 Notes Phase I Exchange Cap, then the DGL Companies will prorate the amount of such Existing 2020 Notes that will be accepted for exchange in the Phase I 2020 Notes Exchange Offer based on the aggregate principal amount of such Existing 2020 Notes that were properly tendered (and not validly withdrawn) prior to the Expiration Date in connection with the Phase I 2020 Notes Exchange Offer. Such Existing 2020 Notes not accepted in the Phase I 2020 Notes Exchange Offer, if also tendered in the Phase II 2020 Notes Exchange Offer, will be automatically tendered in the Phase II 2020 Notes Exchange Offer. If you elect to tender your Existing 2020 Notes in both the Phase I 2020 Notes Exchange Offer and the Phase II 2020 Notes Exchange Offer, you will, subject to applicable law, have no right to withdraw tendered Existing 2020 Notes if the Phase I 2020 Notes Exchange Offer is over-subscribed and your Existing 2020 Notes are accepted in the Phase II 2020 Notes Exchange Offer after the Withdrawal Deadline (as defined below) has passed.

Each Eligible Holder of Existing 2020 Notes tendering its Existing 2020 Notes in the Phase II 2020 Notes Exchange Offer will be required to elect (subject to the proration and allocation mechanics as described below and in the Offering Memorandum and the related letter of transmittal) whether it wishes to receive the Exchange Consideration in the form of New DGL1 2022 Notes or New DGL2 2022 Notes in exchange for each $1,000 principal amount of such Existing 2020 Notes properly tendered and accepted for exchange. However, the aggregate principal amount of New Notes to be issued pursuant to the Phase II 2020 Notes Exchange Offer will be limited to (i) in the case of the New DGL1 2022 Notes, up to the DGL1 2022 Notes Phase II Exchange Cap and (ii) in the case of the New DGL2 2022 Notes, up to the DGL2 2022 Notes Phase II Exchange Cap. Unless specifically indicated otherwise in the letter of transmittal, Eligible Holders of Existing 2020 Notes who tender any Existing 2020 Notes in the Phase II 2020 Notes Exchange Offer will be deemed to have elected to receive New DGL1 2022 Notes as the form of Exchange Consideration (subject to the proration and allocation mechanics as described below).

If acceptance of all Existing 2020 Notes that are properly tendered (and not validly withdrawn) in the Phase II 2020 Notes Exchange Offer would require the DGL Companies to issue New Notes pursuant to the Phase II 2020 Notes Exchange Offer in an amount that would not exceed the applicable Exchange Cap, then all Eligible Holders whose Existing 2020 Notes are accepted in the Phase II 2020 Notes Exchange Offer will receive their Exchange Consideration in the form they elected to receive.

If, however, acceptance of all Existing 2020 Notes that are properly tendered (and not validly withdrawn) in the Phase II 2020 Notes Exchange Offer would require the DGL Companies to issue New Notes pursuant to the Phase II 2020 Notes Exchange Offer in an amount that would, based on elections by Eligible Holders, exceed an Exchange Cap, then all Eligible Holders of Existing 2020 Notes whose Existing 2020 Notes are accepted in the Phase II 2020 Notes Exchange Offer will receive the same proportionate amount of New DGL1 2022 Notes and New DGL2 2022 Notes, irrespective of which series of New Notes an Eligible Holder elected to receive. In this situation, the New Notes that will be issued as Exchange Consideration will be allocated to Existing 2020 Notes accepted in the Phase II 2020 Notes Exchange Offer based on a waterfall hierarchy as follows:

(a)	First, New DGL1 2022 Notes will be issued and delivered as Exchange Consideration to Eligible Holders whose Existing 2020 Notes are accepted for exchange in connection with the Phase II 2020 Notes Exchange Offer, subject to re-allocation of a prorated portion of this Exchange Consideration if the issuance of such New DGL1 2022 Notes would exceed the DGL1 2022 Notes Phase II Exchange Cap.
(b)	Second, New DGL2 2022 Notes will be issued and delivered as Exchange Consideration to Eligible Holders whose Existing 2020 Notes are accepted for exchange in connection with the Phase II 2020 Notes Exchange Offer.

For each tranche of New Notes to be issued in the Phase II 2020 Notes Exchange Offer, the aggregate principal amount an Eligible Holder whose Existing 2020 Notes are accepted in the Phase II 2020 Notes Exchange Offer will be entitled to receive will be determined based on the aggregate principal amounts of Existing 2020 Notes tendered and accepted in the Phase II 2020 Exchange Offer and the Exchange Caps as described in the Offering Memorandum.

Any election to receive a particular tranche of New Notes as Exchange Consideration in the Phase II 2020 Notes Exchange Offer will be deemed to include an election to receive the other tranche of New Notes to be issued in the Phase II 2020 Notes Exchange Offer if the Phase II 2020 Notes Exchange Offer or any type of consideration is over-subscribed pursuant to the proration and allocation mechanics described in the Offering Memorandum and the Letter of Transmittal. Subject to applicable law, you will have no right to withdraw tendered Existing 2020 Notes if the consideration you elect is over-subscribed and you receive different consideration than your election after the Withdrawal Deadline has passed.

Eligible Holders may not deliver a consent in a Consent Solicitation without tendering Existing DGL Notes of the applicable series in the related Exchange Offer. If an Eligible Holder tenders Existing DGL Notes in an Exchange Offer, such Eligible Holder will be deemed to deliver its consent, with respect to the principal amount of such tendered Existing DGL Notes, to the Proposed Amendments with respect to the applicable series. After the withdrawal deadline of 5:00 p.m., New York City time, on December 18, 2018 (unless extended with respect to an Exchange Offer) (such date and time with respect to an Exchange Offer, as the same may be extended for such Exchange Offer, the “Withdrawal Deadline”) and before the applicable Expiration Date, upon receipt of valid consents sufficient to effect the Proposed Amendments, Digicel and the trustee under the Existing DGL Indentures will execute and deliver supplemental indentures relating to the Proposed Amendments. The Proposed Amendments with respect to the Existing 2020 Notes will become operative upon consummation of the Phase II 2020 Notes Exchange Offer and the Proposed Amendments with respect to the Existing 2022 Notes will become operative upon consummation of the Phase II 2022 Notes Exchange Offer.

Upon the terms and subject to the conditions of an Exchange Offer, the settlement date for any Exchange Offer will occur promptly after the applicable Expiration Date (the “Settlement Date”).

Documents relating to the Exchange Offers and Consent Solicitations will only be distributed to holders of Existing DGL Notes who certify that they are (i) “qualified institutional buyers” within the meaning of Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), or (ii) persons outside the United States that are not “U.S. persons” within the meaning of Regulation S under the Securities Act (such holders, “Eligible Holders”). The complete terms and conditions of the Exchange Offers and the Consent Solicitations are described in the Offering Memorandum and related letter of transmittal, copies of which may be obtained by contacting Global Bondholder Services Corporation, the exchange agent and information agent in connection with the Exchange Offers and Consent Solicitations, at [phone] (U.S. toll-free), [phone] (banks and brokers) or by emailing [e-mail]. Holders of the Existing DGL Notes may also complete and submit a letter of eligibility online at http://gbsc-usa.com/eligibility/digicel.

Holders of the Existing Notes that are U.S. persons and not qualified institutional buyers will not be able to receive such documents, but Digicel Group Limited will make alternative arrangements available to ensure that they can participate in the Consent Solicitations on a comparable basis. Such holders should contact Digicel and, after furnishing proof of their status as non-qualified institutional buyers that are US persons, will receive information about arrangements available to them.

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 135c under the Securities Act. The Exchange Offers and Consent Solicitations are being 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.

About Digicel

Digicel Group Limited is a limited liability exempted company incorporated under the laws of Bermuda and owned by Mr. Denis O’Brien.

Digicel Group is a leading integrated telecommunications and entertainment provider with operations in 31 markets in the Caribbean, Central America and Asia Pacific. After 17 years of operation, total investment to date stands at over US$5 billion worldwide.

Digicel 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.