Cell C, SA's third-largest network operator, says it has successfully raised EUR240 million - or R3.3 billion - on the bond market.
The operator, which has around 20 million subscribers, says the proceeds of this bond will be used to fund its capital expenditure and cash requirements in furtherance of its business strategy.
It says the new bond supplements the about EUR160 million (R2.2 billion) that it has already secured, taking total outstanding notes to EUR400 million, or R5.5 billion.
In a statement, the mobile operator says all the outstanding notes have a maturity date of July 2018, and an interest rate of 8.625%. It adds the initial principle amount was increased due to investor appetite and the offering was still oversubscribed.
Cell C CEO Jose dos Santos says the bond raising is a "further sign of the tremendous confidence our bond investors have in our strategy, which has been underpinned by a strong turn around in the company's performance over the past 18 months. This issuance also reflects the company's excellent track record of servicing its debt obligations."
Cell C did not immediately indicate how the new bonds impacted on the R2 billion in bonds that it has to pay back or refinance at the end of the month, or whether it had rolled that debt over to July 2018. Ratings agency Standard & Poor's recently noted Cell C faced a ratings downgrade if it failed to refinance the bonds.
The ratings agency added Cell C has a strong track record in servicing its financings and "enjoys the full commitment of Oger Telecom to support Cell C with its financial requirements".
The operator, SA's third-largest, said earlier this month it was "well on track to execute its plans to service the maturing bonds. On completion, Cell C fully expects S&P to resolve this credit watch given its technical nature."
However, Oger Telecom is looking at the possibility of selling its majority stake in Cell C because of the most recent termination rate cuts, which do not favour Cell C as much as initially expected, Reuters reported in March.
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