The recapitalisation of Cell C is taking longer than expected, and will now only be concluded “towards the end of August”, the mobile operator’s biggest shareholder said on Monday.
JSE-listed Blue Label Telecoms, which holds 45% of Cell C’s equity (a figure that will rise to just shy of 50% following the successful conclusion of the recap transaction), announced the delay in a notice to shareholders. It did not say what was causing the delay.
“Certain of the binding long-form agreements are not yet in final execution form and are in the process of finalisation,” Blue Label said, adding that the “final stages of the recapitalisation process are progressing well”.
Blue Label announced on 5 July that lenders to Cell C, which has for years struggled to keep its head above water thanks to a mountain of debt on its balance sheet, had approved a “compromise offer” that would place the fourth-placed South African mobile operator in a more sustainable debt position.
Cell C’s secured lenders, who previously held publicly listed bonds or notes, voted in favour of the compromise offer of 20c of every R1 of debt.
The listed notes that were subject to the vote – a total of US$184-million, or just over R3-billion at the time of writing – are a portion of Cell C’s overall debt of R7.3-billion owed to secured lenders.
Blue Label shares were last trading hands at R7.14 at about 10am on Monday, up 0.7% on the session. In the past year, the shares have gained 55.8%. However, they remain well below their 2016 peak of above R20/share. – © 2022 NewsCentral Media