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News » Itel’s parent company to refinance $3.5Bn debt, eyes IPO

Itel’s parent company to refinance $3.5Bn debt, eyes IPO

itels-parent-company-to-refinance-debt
Photo from Jamaica Special Economic Zone Authority

MONTEGO BAY, JAMAICA — Outsourcing Management Limited (OML), itel’s parent company, recently unveiled its plans to refinance $3.5 billion in debt, offering bondholders the option to convert their holdings into shares if the company proceeds with a stock exchange listing.

“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 queries from The Financial Gleaner

This refinancing initiative aligns with OML’s strategy to bolster its financial position while preparing for potential public listing prospects.

Higher bond yields proposed amid market adjustments

The refinancing terms include increased yields for bondholders, reflecting adjustments recommended by Sygnus Capital, the bond arranger. U.S.-indexed notes will rise from 5.5% to 7.0%, while local currency notes will increase from 8.5% to 9.5%.

Bondholders may also convert their holdings into shares at a 10% discount if OML launches an initial public offering (IPO). While Epstein refrained from committing to a specific timeline for the IPO, he hinted at plans for a “liquidity event” within three years.

Key details of the $3.5Bn refinancing plan

The refinancing is structured across four tranches:

  • Tranche I: $984 million
  • Tranche II: $275 million
  • Tranche III: $2 billion
  • Tranche IV: $249.5 million

The term sheet includes protective provisions for bondholders, such as the right to demand full repayment in case of default or opt for a 3% interest rate increase under certain conditions. Additionally, OML must adhere to minimum debt coverage and earnings ratios as part of the agreement.

The original bond, issued in 2021 and maturing in September 2024, raised questions about repayment timelines. 

Addressing these concerns, Epstein clarified that all payments were made on time but noted administrative delays in finalizing the refinancing before maturity. “It was always our intention to refinance before they matured,” he stated.

OML’s growth and IPO ambitions highlighted

Founded in 2012 with just seven employees, OML has experienced remarkable growth, now employing over 6,000 staff across locations in Jamaica, the United States, Belize, Guyana, Honduras, Colombia, and St. Lucia. The company credits its expansion to strategic investments aimed at scaling operations and enhancing service delivery across the region.

This refinancing effort represents another milestone in OML’s journey toward long-term financial stability and potential public listing aspirations. This move could further solidify its position as a leading regional outsourcing provider.

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