Cellular operator, Cell C, has begun drawing on the $252 million funding facilities that were finalised at the end of January, on the back of strong growth in the company`s first 18 months.
Cell C states that it is utilising the funding for budgeted capital expenditure and operational expenses as it sets about completing its own network and extending its services in pursuit of the 25% market share it aims to achieve by 2007.
The company says that despite a downturn in the global telecommunications industry, both foreign and local investors have backed Cell C to meet its profitability target for 2004 and its cash positive target for 2005.
In what is considered to be a major direct foreign investment in SA, Kreditanstalt fur Wierderaufbau, Landesbank Shleswig-Holstein Girozentrale, Citibank NA and Arab Bank have provided funding of $112 million.
A further $140 million has been made available to the organisation by Nedbank, Absa, the Development Bank of South Africa, Investec and the Industrial Development Corporation.
According to the organisation, this brings Cell C`s senior debt to a total of $252 million - as foreseen in its original business plans - and this will complement its current junior debt facility of $178 million and equity of $245 million.
Cell C is owned by 3C Telecommunications, which in turn is jointly owned by Saudi Oger (60% shareholder) and CellSaf (40%), a consortium of 30 black empowerment companies.
Saudi Oger provided $147 million in equity to launch the company and CellSaf has met its equity funding requirement of $98 million, which Cell C says constitutes one of the largest black empowerment transactions in SA and was financed by Absa and Citibank SA.
"We have more than met our early targets, so financial institutions see us as a serious player in the local industry. Cell C has shown that it has committed shareholders, strong financial management and a clear ability to make strong inroads into the market," says Cell C chairman and CEO Talaat Laham.
"Also, our dynamic entry into the market has had a positive effect, causing accelerated market growth. So, our investors have good reason to believe we can provide them with growth and good returns."
He says that growth in Cell C`s connected subscriber base last year exceeded original projections of 800 000, coming in at more than one million, while in the first quarter of 2003, the subscriber base grew to 1.4 million and the current business plan projects two million by the end of the year.
"What we`ve promised to do on market, financial and social levels we have more than delivered on, and we`re confident that we can continue doing what we set out to do," says Laham.
Related stories:
R300m loan to boost Cell C`s roll-out
Share
