All-important Cell C funding meeting fails to take off

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The future of Cell C’s recapitalisation remains in the balance after a critical meeting to decide on the future of its finances failed to proceed.

The bondholder meeting, scheduled for 20 June, was cancelled after it failed to meet a quorum. At least 75% of the bondholders must be present to meet quorum.

Cell C’s biggest shareholder Blue Label Telecoms informed shareholders today of the failed meeting, saying it has now been pencilled in for 5 July.

In a statement, Blue Label says a large bondholder missed the voting deadline of 16 June to tender necessary instructions, which meant the meeting originally scheduled did not meet the quorum requirements.

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

The bondholders 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.

Today, Cell C announced: “A majority of noteholders have already presented their instructions for the noteholder meeting (or any adjournment thereof). These instructions are expected to remain in place until the new noteholder meeting and are sufficient to achieve the reduced quorum requirements, and as at today’s date, correspond to 92.18% support in favour of the compromise offer.”

The debt-burdened Cell C has been waiting for recapitalisation for some time, and management remains optimistic that new funds to lift the company will be available soon.

“We believe the requisite quorum and majority vote in favour will be achieved, making this another critical milestone in Cell C’s financial restructuring and recapitalisation,” says Cell C CEO Douglas Craigie Stevenson.

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