Update: Cell C told MyBroadband that it was incorrectly reported by Bloomberg that Cell C refinanced R1.4 billion of debt with loans from Blue Label Telecoms and a consortium of banks.
Cell C confirmed that it has “concluded the refinancing of its R1.4 billion facility from Blue Label Telecoms with a consortium of local banks at an improved rate of interest in July 2018”.
This information is not new and was previously disclosed, said Cell C.
Cell C Pty Ltd. said it’s refinanced 1.4 billion rand ($100 million) of debt on better terms with loans from its biggest shareholder and a consortium of banks as the South African wireless carrier considers a listing in 2020.
South Africa’s third-largest operator is also in talks with vendors including Huawei Technologies Co. for an additional facility of 1.4 billion rand to fund capital expenditure, a company representative said by email in response to questions.
Cell C emerged last year from a protracted debt-restructuring rescue plan with Blue Label Telecoms Ltd. taking a 45 percent stake. That restructuring reduced Cell C’s debt by two-thirds to less than 6 billion rand, but much of the remainder was still funded at onerous terms with interest rates as high as 17 percent.
Better terms and new financing will help Cell C improve its results, which have been burdened by high interest-rate payments. In turn, those results have hit Blue Label Telecoms’s shares, which have dropped almost 70 percent since it took the stake in Cell C.
Cell C, which competes with MTN Group Ltd. and Vodacom Group Ltd. in South Africa, is planning to sell shares in Johannesburg by the first quarter of 2020 to fund acquisitions, Chief Executive Officer Jose Dos Santos said Aug. 21.