Digicel Group, the telecoms group founded by businessman Denis O’Brien, said it had not seen “any significant impact” so far from Haiti’s recent descent into a state of emergency.
Haiti spiralled into anarchy this month as gangs took control of large parts of the capital, Port-au-Prince, and the country’s acting prime minister, Ariel Henry, has been unable to return from a trip abroad.
Gang leaders such as Jimmy Cherizier, a former police officer, claim Mr Henry has deepened poverty in a country where annual domestic product per capita before the latest crisis was under $2,260 (€2,090), according to the International Monetary Fund.
While Mr Henry agreed on March 12th to resign following the appointment of a council that would set up a transition government, that process has stalled due to squabbles among various parties and reports of concerns about the security of the council’s members.
“Our concern, first and foremost, is for the safety of our amazing staff in Haiti; and secondly, of course, with keeping our customers connected. We are closely monitoring the situation and have activated our crisis-management procedures, with our teams on the ground doing an incredible job maintaining critical services for our customers,” said a spokesman for Digicel, one of two major telecoms providers in the Caribbean country.
“We have not seen any significant impact on our business at this stage but we continue to monitor the situation.”
Digicel’s interim chief executive, Maarten Boute, said on March 3rd, at the start of the latest crisis, that international connectivity to Haiti for Digicel had been hit temporarily due to a double fibre cut as a result of violent clashes in a suburb of Port-au-Prince.
Since Digicel’s 2006 launch in Haiti, the nation has lurched from one natural disaster to the next – including devastating earthquakes in 2010 and 2021 – and periodic civil disorder. The country has been submerged in perma-chaos since then – president Jovenel Moise was assassinated in July 2021.
Problems in Haiti, Digicel’s largest market by mobile subscribers and one of its traditional main earners, were a key factor behind the group seeking a major debt restructuring last year.
The deal, completed in January, saw Mr O’Brien cede 90 per cent of the company to a group of bondholders in exchange for a $1.7 billion debt writedown. He has an opportunity to build his stake up to 20 per cent, should warrants attached as an incentive to the restructuring end up being triggered.
Documents published by Digicel in relation to the restructuring last August highlight that Mr Henry’s decision to remove fuel subsidies almost a year earlier – triggering a rapid rise in inflation – had hit the company’s earnings before interest, tax, depreciation and amortisation (ebitda) severely.
“Thus, toward the end of 2022, in light of the crisis in Haiti and its material effects on the group’s ebitda, it became clear that a more comprehensive restructuring of the group’s capital structure was necessary,” it said.
Digicel warned in the documents that it expected “further significant negative impacts to our operations and financial performance as a result of the instability in Haiti”.
The Haitian gourde has lost about half of its value against the US dollar, the currency in which Digicel reports financial results and its debt is denominated, since late 2020. Still, the gourde has remained relatively stable throughout the latest crisis.
About five million people in the country – close to 45 per cent of the population – are now facing acute levels of food insecurity, according to the Save the Children charity organisation.
Digicel operates in 25 markets across the Caribbean and Central America.
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