Cell C’s largest shareholder, Blue Label Telecoms, disclosed on Thursday that a term sheet to recapitalise the mobile operator has finally been signed after protracted negotiations involving shareholders, debt holders and numerous other affected stakeholders.
“Shareholders are advised that The Prepaid Company, a wholly owned subsidiary of Blue Label and a shareholder of 45% of the issued share capital of Cell C, has concluded a term sheet for an airtime purchase transaction with Investec Bank, FirstRand Bank (through Rand Merchant Bank) and other financiers, the proceeds of which are intended to be utilised for the recapitalisation of Cell C,” Blue Label said in a statement late on Thursday.
“This arrangement is subject to the conclusion of all legal documentation and fulfilment of all conditions precedent under such legal documentation,” it added. It said investors should exercise caution in trading in its shares until further details are announced.
The deal, once concluded, is expected to deal with Cell C’s crippling debt – seen as the last hurdle to a turnaround at the long-struggling mobile operator.
Details of the recap remain scant for now – Blue Label co-CEO Brett Levy said the quantum of the deal and other details will be announced in due course.
Cell C chief financial officer Zaf Mahomed said Cell C had R8-billion in debt on its balance sheet at the end of May. There was also an additional R4-billion in finance leases, of which R2.8-billion were long term and R1.2-billion short term in nature. – © 2021 NewsCentral Media
