6 days ago
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Jamaica-based Outsourcing Management Limited (OML), which trades as iTel, plans to refinance $3.5 billion in debt, offering bondholders the option to convert their holdings into shares, provided the company lists on the stock exchange.
“We are in the middle of the fundraise, and it should be concluded in January,” said Yoni Epstein, CEO and founder of OML, in response to Financial Gleaner queries. OML operates a regional call centre.
The bond refinancing comes amid slow but steady reductions in interest rates by the central bank. The new terms however will see higher yields. Its US-indexed notes will increase from 5.5 per cent to 7.0 per cent, while local currency notes will rise from 8.5 per cent to 9.5 per cent. These rates were recommended by Sygnus Capital, the arranger of the bond.
Bondholders will have the option to convert their holdings into shares at a 10 per cent discount in the event of an initial public offering (IPO). Epstein remained guarded when asked on a timeline for an IPO: “I would say that we intend to have a liquidity event in the next three years”.
The term sheet also outlines provisions for bondholders to demand full repayment in the event of default. Under certain default conditions, bondholders may opt for a 3.0 percentage point increase in interest. OML will also be required to meet minimum debt coverage and earnings ratios as part of the agreement.
The bond is structured into four tranches: Tranche I at $984 million , tranche II at $275 million, tranche III at $2.0 billion, and tranche IV: $249.5 million.
The bond initially issued in 2021 matured in September. The maturation raised questions on whether the principal would be repaid or refinanced.
“We have made all bond payments on time, every quarter, since issuing the bond in 2021,” he stated. “The four tranches became due in September 2024, and it was always our intention to refinance before they matured. This was not achieved due to administrative delays,” Epstein explained.
He also clarified that the bond is separate from preference shares held by Portland Private Equity, known debt holders in OML.
OML, founded in 2012 with just seven employees, has since grown to over 6,000 staff, driven by investments across the region to fuel its expansion. OML locations are in Jamaica, USA, Belize, Honduras, and St Lucia.
English (US) ·