Corporate restructuring under Bermuda law appears to have given the Digicel Group a new lease of life, allowing the telecom provider to continue operations as usual.

Bond investors signed a deal that strips founder and chairman Denis O'Brien of most of his stake in the telecoms group in exchange for a $1.7 billion debt write-off.

The restructuring deal, which has been a few months in the making, will probably take a few more months to complete, but will leave Mr O’Brien with a board seat and eventually 10 to 20 per cent of the company, The Irish Times is reporting.

The news group said the restructuring is on track to be completed in a scheme of arrangement carried out through the Bermuda courts and “rubber-stamped through a US reorganisation” under Chapter 15 bankruptcy protection.

Digicel was forced into a Bermuda scheme of arrangement three years ago, faced with its crippling $7 billion debt.

Last summer, the company had to sell a Pacific unit to the Australian telecoms group Telstra in an effort to claw back cash.

However, things went from bad to worse when economic disruption and public unrest in Haiti created the instability that put a huge hole in earnings from one of its key mobile phone markets.

Commenting this week on the latest deal, Digicel chief executive Oliver Coughlan called it a positive step.

He said: “The fundamentals of our business remain strong, thanks to our dedicated and loyal staff, customers and vendors across our 25 markets in the Caribbean and Central America.”

The restructuring deal will see holders of almost $1.18 billion of bonds convert their investment into an initial 62 per cent stake. It could increase to 90 per cent as the bondholders-turned-equity participants take part in a $110 million rights issue and further backstop agreement.

Digicel would come under the control of the bond investment firms, including US-based PGIM, GoldenTree Asset Management and Contrarian Capital Management.