Cell C has revealed that its subscriber base had grown to 18,1m at the end of June, a 59% improvement on a year ago, as it announces plans to restructure its interest-bearing debt.
The company reported a 10,5% increase in revenue over the same period, it said.
The mobile operator, South Africa’s third largest after Vodacom and MTN, revealed the numbers in a statement on Friday in which it said it would extend the maturity date of €160m (R2,3bn) of senior debt.
“As part of the transaction, Cell C has offered to buy back debt from any bond holder who does not wish to extend,” the company said in the statement.
“The expected extension is further confirmation of the confidence that funders have in the future of Cell C and will [allow the company] to continue to invest heavily in its network infrastructure in support of its business plan,” it added.
“The extension will allow Cell C to channel equity and cash generated in the business to increase its capacity to continue to grow the company,” said CEO Jose Dos Santos.
Earlier on Friday, Reuters reported that Cell C planned to restructure €77,4m worth of senior debt in a move designed to improvement its cash management. Cell C has confirmed the €77,4m quoted by Reuters is only a portion of the bond holding.
Cell C, which is owned by Saudi Oger, is engaged in a protracted price war with its bigger rivals. This week, it cut the price of its promotional prepaid plan, introduced in April, from 66c/minute to just 50c/minute.
The latest cut comes in the same week that MTN announced a new product plan called Pulse, aimed at the youth market, that offers MTN customers on the same plan calls for just 29c/minute.
Cell C said it intended asking its bond holders for permission to extend by three years the maturity of senior secured notes due in July 2015, Reuters reported.
In May, Cell C revealed it had grown its subscriber base in 2013 by 35%, ending the year with 13,6m customers. The unlisted company, which isn’t required to disclose its financial numbers, said at the time that it had added a net 3,5m customers in 2013, mainly driven by the prepaid segment, which grew by 40%, or by 3,2m subscribers.
At the end of April this year, Cell C had 16,6m active subscribers on its books. It planned to spend R2,3bn on its network in 2014. — © 2014 NewsCentral Media
