Cell C’s parent company and effective controlling shareholder, Dubai-based Oger Telecom, is injecting US$180m, or about R1,5bn, as new equity into company, the SA mobile telecommunications operator said on Thursday.
In a brief statement, Cell C CEO Alan Knott-Craig says: “This foreign investment into SA demonstrates the confidence our shareholders have in both SA and Cell C.”
TechCentral understands that Cell C’s black economic empowerment shareholder, CellSAf, which holds 25% of the operator’s shares, is not contributing equity alongside Oger’s investment.
The news of the investment comes a little over two years after Cell C restructured its long-term debt, at the time reducing it to R6,6bn, from R13bn previously, in a deal that was seen as an effort to make it easier for it to raise financing to fund the construction of its next-generation 3G network. The company’s shareholders agreed in December 2009 to convert their loans to the company into equity, Cell C said at the time.
Then, in August 2010, Cell C signed a €240m loan agreement with China Development Bank.
Knott-Craig tells TechCentral that Oger’s latest investment will not have any impact on the percentage equity held by any of the shareholders in Cell C. The equity injection, he says, is a cheaper way of raising the funding the company needs than by securing loans and adding debt to the balance sheet. The money will be used to grow the business, Knott-Craig says. — (c) 2012 NewsCentral Media
- More to follow on Friday