Cellular operator Cell C is to receive a loan facility of R300 million from the Industrial Development Corporation (IDC), which is expected to be used to finance capital expenditure, services and other costs associated with the roll-out of its network.
The company already has about 700 live base stations and plans to establish a further 1 500 by next month, although the process is becoming more difficult as it is becoming harder to acquire permits for suitable sites.
According to the IDC, when it provides funding, preference is given to projects that are sizeable, have economic merit in terms of profitability and sustainability, and which have developmental impact in terms of jobs, exports, spatial, empowerment and downstream opportunities.
As Cell C`s project focus will be on technology-intensive infrastructure development and requires the mobilisation of private and public funding, it is thus considered suitable for IDC funding.
"While the loan was actually applied for and approved quite some time ago, we only made the announcement now that Cell C has begun drawing on it," says Loyiso Jiya, head of the IDC`s private public partnership strategic business unit.
"The loan - which constitutes 13% of Cell C`s overall funding requirements - is based on the organisation`s ability to repay and is classified as one of our medium-term loans. These have a repayment period of between five and 10 years."
Moira Sheridan, Cell C`s acting head of corporate communications, confirmed that the IDC had made the funding available, although she stressed that this was part of an historical arrangement with the organisation.
"We will be releasing details of Cell C`s overall funding provisions later this week, which should clear up any questions the industry may have about our organisation`s financial issues."
Cell C is a wholly owned subsidiary of 3C Telecommunications, which is 60% owned by Oger Telecom (SA), a subsidiary of Saudi Oger, and 40% by CellSaf, which consists of about 30 black economic empowerment groups and social empowerment organisations.
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