Cell C has defaulted on the payment of interest on a US$184-million loan, which was due in December 2019, along with interest and capital repayments related to bilateral loan facilities with Nedbank, China Development Bank, the Development Bank of Southern Africa and the Industrial and Commercial Bank of China.
This is according to the financially distressed mobile operator’s largest shareholder, Blue Label Telecoms, which said in a statement to shareholders on Tuesday that the Nedbank, China Development Bank, DBSA and ICBC payments were due this month.
“Currently, none of the bilateral loan facilities has been accelerated as note holders are aware and support that Cell C is committed to resolving the situation by agreeing to restructuring terms with its lenders while it also continues to work proactively with all stakeholders to improve its liquidity, debt profile and long-term competitiveness,” Blue Label said.
Blue Label shares were trading down more than 13% at R2.75 apiece shortly after midday in Johannesburg, despite the company already having written down the carrying value of its 45% stake in Cell C to zero.
A Cell C spokeswoman told TechCentral that the company is in “active discussions with lenders and shareholders” regarding a planned recapitalisation. Potential lenders include businessman Jonathan Beare’s Buffet Consortium.
”Our turnaround strategy is to ensure operational efficiencies, restructure the balance sheet, implement a revised network strategy and improve overall liquidity. We continue to engage with all stakeholders throughout this process and believe we have made good progress,” said Cell C CEO Douglas Craigie Stevenson in a statement published on Blue Label’s website. — (c) 2020 NewsCentral Media