Cell C rescue transaction delayed again
Major Cell C shareholder Blue Label Telecoms says that a recapitalisation transaction to save the troubled network operator has been pushed back again.
The announcement came in a JSE news service announcement on Wednesday, ahead of Thursday’s release of Blue Label Group’s annual results for the year ended 31 May 2022.
In its latest update on the transaction’s development, Blue Label said the binding long-form agreements for the recapitalisation of Cell C were expected to be completed in their entirety “shortly”.
“It is anticipated that the recapitalisation process, the completion of which has endured for longer than initially anticipated, is expected to close by mid-September 2022,” the company said.
The planned transaction has suffered numerous delays since Cell C first revealed it was struggling to repay debtors and would recapitalise its balance sheet as part of a broader turnaround strategy.
In June 2021, sources close to the company first told Bloomberg it was “close” to completing a recapitalisation deal.
After several delays, the company finally managed to get the transaction approved by shareholders in early July 2022.
Initially, Blue Label said the transaction would be finalised in late July, but this was delayed to the end of August.
The transaction aims to restructure Cell C’s debt of roughly R7.3 billion.
Of this amount, $184,002,000 (R3.1 billion) is First Priority Senior Secured Notes that Cell C issued and was publicly listed.
The holders of these notes had to vote whether to accept the deal, with 75% of votes controlled by debtors required to make it binding on all shareholders.
The noteholder meeting was held on 5 July 2022 after being delayed due to a lack of quorum on 20 June.
The secured lenders voted to take an 80% haircut on their debt and receive the remaining 20% as a cash-out.
Cell C will present its annual results for the year ended 31 December 2021 and interim results for the six months ended 30 June 2022 on Wednesday, 14 September 2022.
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