Tuesday, 26 September 2017

Cell C deal done

By Mary Lennighan, Total Telecom
Wednesday 16 August 17

South African operator completes recapitalisation, reduces debt burden.

Cell C has a new ownership structure and a more manageable debt level following the completion of its recapitalisation plan earlier this month. The South African mobile operator is now in the hands of Blue Label Telecoms…

Cell C has a new ownership structure and a more manageable debt level following the completion of its recapitalisation plan earlier this month.

The South African mobile operator is now in the hands of Blue Label Telecoms, which holds a 45% stake, 3C Telecommunications with 30%, and Net1 with 15%. Company management and employees hold 10%.

Cell C CEO Jose Dos Santos welcomed the completion of a lengthy restructuring process for the operator.

"The recapitalisation provides a sustainable growth platform for Cell C that will promote healthy competition in the South African telecom market to further drive down costs and improve our value offerings," he said in a statement, last week.

The company itself added that it believes it "now has a sustainable capital structure to deliver on the group's strategic objectives to improve financial returns from increased network utilisation, upgrade network infrastructure and expand LTE coverage."

Cell C has been working on its recapitalisation plan for the best part of two years, following the collapse of merger talks with rival Telkom SA in late 2015.

The firm agreed the plan with Blue Label in October last year, at which time it said the move would enable it to reduce net debt from "high-double digit numbers" to 8 billion rand.

Last week Cell C said that following the recapitalisation its net debt stands at "no more than ZAR6 billion," (€387 million/US$454 million), including $184 million in bonds that are fully hedged into South African rand.

The firm also said it is in the process of completing the required regulatory notifications for the plan.

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