[dropcap]C[/dropcap]ell C plans to raise as much as US$464m (R6bn) from the sale of two bonds as part of the South African mobile phone company’s recapitalisation that will enable Blue Label Telecoms to buy a stake, according to two people familiar with the matter.
The country’s third largest wireless carrier will sell $184m of three-year senior secured bonds and $280m of five-year securities, according to the people, who asked not to be identified as the plans aren’t public.
Both notes will pay a coupon of 8.625%, according to the people.
Cell C spokespeople didn’t immediately respond to e-mails requesting comment.
The bonds will be used to repay Cell C’s existing €400m debt due to mature in July 2018, the people said.
That will enable Dubai-based parent company Oger Telecom, which is owed most of the outstanding debt though affiliates, to exit the company and ease the completion of the reorganisation that will see Johannesburg-based Blue Label take a stake, according to the people.
The planned bond issues are expected to help the wireless carrier complete the transaction with Blue Label almost two years after talks began.
The agreement to sell a 45% stake for R5.5bn will initially reduce Cell C’s debt by 73% without having to re-apply for an operating licence, people familiar with the matter said last month. — (c) 2017 Bloomberg LP
- See also: Blue Label wraps up R5.5bn Cell C deal