Cell C's corporate ratings have been upgraded in five categories. This follows the company's ongoing improved financial performance, as well as Saudi Telecom's purchase of a 35% equity stake in Oger Telecom, which owns 75% of Cell C.
Moody's Investors Service states Cell C's corporate family rating and probability of default ratings have been upgraded to B3 from Caa1. Senior secured notes due 2012 have been upgraded to B2 from B3, and senior subordinated notes due 2015 to Caa2 from Caa3.
"Thanks in part to the positive reaction to the purchase by Saudi Oger of US dollar and euro bonds issued by Cell C, Moody's has upgraded the rating outlook from 'rating under review' to 'stable'," says Cell C CFO Fabrizio Mambrini.
Strategy pays off
Last year, Moody's downgraded Cell C's ratings as the company struggled to turn around its earnings.
The international financial services company says it raised ratings on Cell C's bonds, with expectations the company would continue to deliver sustainable improvements in operating performance.
Cell C CEO Jeffery Hedberg entered the 2007 financial year with a turnaround strategy for the company. The cellular operator states its revenue increased by R590 million during the 2007/8 financial year. Compared with the previous financial year, operating profit has grown by 36% and earnings are at R517 million before EBITDA.
"Our management, staff and particularly our customers have responded exceptionally well to our concerted efforts to grow profitably, as part of our turnaround strategy,” says Hedberg.
Moody's uses the letters Aaa, Aa, A, Baa, Ba, B, Caa, Ca,andC where ratings Aa-Caa are qualified by numbers 1-3. The credit rating service provider states bonds between Caa1 and Caa3 are of poor standing in the speculative grade, which have high credit risk. Bonds from Baa3 up to Aaa fall within the investment grade of bonds that are sought out by investors.
Related stories:
S&P downgrades Cell C
Cell C's turnaround proves profitable
Cell C gains weight
Share
