A critical meeting to decide the future of Cell C was not able to proceed to a vote on a planned recapitalisation this week. This is after one of the largest lenders failed to meet a set deadline to file the necessary instructions.
The meeting, at which secured lenders were set to vote on a “compromise offer” aimed at placing Cell C into a sustainable debt position has now been postponed by two weeks, to 5 July.
Blue Label Telecoms, Cell C’s largest shareholder, explained last month that this latest phase of the recap project involves a bond process to get approval of the compromise offer that had been made to secured lenders, who formerly held publicly listed bonds or notes.
“The bondholders will be required to legally indicate their consent to the offer — of 20c for every R1 of debt — by means of a vote. A majority of at least 75% of the vote in favour of the offer is necessary for it to be implemented,” Cell C explained in a statement on 25 May.
The listed bonds or notes (US$184-million worth) is a portion of Cell C’s overall debt of R7.3-billion owed to secured lenders.
However, when the parties met on Monday, a quorum could not be reached. This is because one of the noteholders filed the necessary instructions after the voting deadline of 10am (London time) on 16 June. As a result, the meeting was not quorate and had to be adjourned.
The new meeting, on 5 July, will require a reduced quorum of “one or more persons present and holding or representing at least 25% in principal amount of the notes”, Blue Label said in a statement to investors issued via the JSE.
‘Final step’
“The two-week delay in the noteholder vote has no impact on the timing of the overall Cell C recapitalisation transaction, which is expected to proceed to final close in July 2022,” it added.
In a separate statement, Cell C CEO Douglas Craigie Stevenson said the company believes the “requisite quorum and majority vote in favour will be achieved” at the 5 July meeting.
“The final step to conclude the overall transaction is the signing of conditions precedent and long-form agreements — expected to be finalised in a matter of weeks,” he said. – © 2022 NewsCentral Media
