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Cell C withdraws bond placement from equation

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 01 Nov 2016
The planned recapitalisation of Cell C was announced in December 2015 and is now expected to be implemented by 18 November 2016.
The planned recapitalisation of Cell C was announced in December 2015 and is now expected to be implemented by 18 November 2016.

As the recapitalisation of Cell C continues to gather pace, the mobile network operator has withdrawn the proposed bond placement, which was supposed to see the operator reduce high levels of debt.

Blue Label Telecoms is planning to buy a 45% stake in mobile operator Cell C for R5.5 billion as part of a proposed recapitalisation of Cell C.

The planned recapitalisation of Cell C was announced in December 2015 and is now expected to be implemented by 18 November 2016. The proposed recapitalisation plans to reduce Cell C's net debt to approximately R8 billion and enable the company to continue to deliver on its growth strategy in a sustainable manner.

The company's net debt at the end of 2015 was almost R20 billion, up from R14.3 billion a year before.

In a SENS statement today, Blue Label said: "Blue Label has been informed by Cell C that the bond placement has been withdrawn and that the maximum net borrowings is anticipated to be achieved without the necessity to do so via a bond placement."

As detailed in the transaction announcement, Blue Label notes, a condition precedent to the proposed transaction was the completion by Cell C of a bond placement process which, taking into account the amounts payable by the other investors, would result in its existing net borrowings, comprising any contractual obligations pertaining to monies borrowed, including shareholder loans, less cash and cash equivalents being reduced to a maximum of R8 billion.

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