Cell C is in advanced talks with FirstRand’s unit Rand Merchant Bank and Investec to provide the South African wireless carrier with about R4 billion of fresh capital, according to people familiar with the matter.
The country’s fourth-largest mobile-phone provider, partly owned by Johannesburg-listed Blue Label Telecoms Ltd., is nearing the end of a recapitalization plan to pay down debt, said the people, who asked not to be identified as the information is still private.
Deals have been concluded with former creditors to pave the way for new funding, they said.
Cell C has been struggling under a debt burden of about R10 billion, while its customer growth has come under pressure due to South Africa’s weak economic outlook and the dominance of two larger companies, MTN Group Ltd. and Vodacom Group Ltd.
Cell C said its recapitalization was in progress and at a sensitive stage, with details to follow when it is finalized.
“RMB can confirm that we are in discussions with Cell C and its shareholders regarding financing,” a representative for the lender said. “Client confidentiality precludes us from sharing any details.” Investec declined to comment.
A previous plan for no. 3 wireless operator Telkom to combine its mobile operations with that of Cell C fell apart in 2019 and the recapitalization was approved last year. Cell C previously restructured its finances in 2016, when Blue Label took a 45% stake.
Blue Label’s shares are up 9.3% this year and traded 0.2% lower at the close in Johannesburg.