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Cell C recapitalisation is on track

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Cell C has launched a bond process as the latest step towards recapitalisation and is seeking majority support from its debtors.

Blue Label Telecoms, Cell C’s biggest shareholder, yesterday announced the proposed deal, saying it involves a bond process to “get approval of the compromise offer that has been made to those secured lenders, who formerly held publicly listed bonds or notes”.

The debt-burdened Cell C has been waiting for recapitalisation for some time and the latest development has been welcomed by the telco’s management.

This development comes several months after Blue Label revealed Cell C had appointed independent financial restructuring advisers to assist “in stringent monitoring of the liquidity of the telco as well as designing the revised business plans that support the new operating business model”.

Yesterday, Blue Label notified shareholders: “The bond-holders will be required to legally indicate their consent to the offer – of 20c for every R1 of debt – by means of a vote. A majority of at least 75% of the vote in favour of the offer is necessary for it to be implemented.

“The listed bonds or notes ($184 002 000) is a portion of Cell C’s overall debt of R7.3 billion owed to secured lenders.”

The compromise offer will be tabled for a vote on 20 June.

Commenting on the development, Cell C CEO Douglas Craigie Stevenson says: “The restructuring and refinancing of Cell C has been a long and complicated process. We are pleased to be closer to concluding a transaction that will deleverage the balance sheet and provide the required working capital to operate and grow the business.

“We have a clear business strategy and have right-sized and streamlined the business to ensure operational efficiency. Our network model will reduce network expenses and capital expenditure, allowing the company to access best-in-class infrastructure, benefiting from scale and offering customers a quality network equivalent to bigger competitors.

“We look forward to having greater capacity to ensure a sustainable organisation and take advantage of strategic growth opportunities.”

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13 Aug
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