JSE-listed Blue Label, in an update to shareholders, has announced the next step in the long-awaited recapitalisation of mobile operator Cell C.
This involves a bond process to get approval of the compromise offer that has been made to those secured lenders, who formerly held publicly listed bonds or notes.
The bond holders will be required to legally indicate their consent to the offer of 20c for every R1 of debt by means of a vote during a planned meeting of noteholders on June 20, Cell C explained in a statement following the announcement.
A majority of at least 75% of the vote in favour of the offer is necessary for it to be implemented.
The listed bonds or notes of $184-million is a portion of Cell C’s overall debt of R7.3-billion owed to secured lenders.
“The restructuring and refinancing of Cell C has been a long and complicated process. We are pleased to be closer to concluding a transaction that will deleverage the balance sheet and provide the required working capital to operate and grow the business,” said Cell C CEO Douglas Craigie Stevenson.
“We have a clear business strategy and have right-sized and streamlined the business to ensure operational efficiency. Our network model will reduce network expenses and capital expenditure, allowing the company to access best-in-class infrastructure, benefiting from scale and offering customers a quality network equivalent to bigger competitors. We look forward to having greater capacity to ensure a sustainable organisation and take advantage of strategic growth opportunities,” he concluded.