Mobile operator Cell C’s lengthy recapitalisation deal is likely to be concluded this year, with a term sheet expected in due course.

Significant inroads have been made over the past three to four months to wrap up the complex agreement, which is deemed to be “extremely” fair for all stakeholders and lenders.

“We really believe that we will recap this business this year. There is no [reason] why we should not recap it this year,” says largest shareholder Blue Label joint CEO Brett Levy, noting that, over the past two months, all the stakeholders have been really cooperative to get the deal over the line.

The deal is being discussed with South African, US, Chinese and Lebanese banks, vendors and bondholders.

“To get everyone around the table to agree on a final umbrella agreement . . . has proven to be a lot more difficult than we envisaged and has taken a lot more time.”

However, the discussions, which started over a year-and-a-half ago, will lead to a fair deal for stakeholders and shareholders.

“It is a fair deal for everybody; we will see how the market likes what we have done. [However], it is a really good deal for Cell C. It will give them the chance to recap this business once and for all and go ahead with their vision and strategy,” Levy told media during a virtual presentation of Blue Label’s financial results.

Cell C’s new strategy and vision have been implemented, despite the uncertainty of the recapitalisation deal “hanging over their heads”.

“Their performance through this time has been really good. The management and the board of Cell C have really done a good job,” he adds.

During the period from June 2019 to May 2020, Cell C witnessed a 28% reduction in customers but only a 2% decline in service revenue to R13.9-billion.

Earnings before interest, taxes, depreciation and amortisation grew 10% to R3.74-billion.

Cell C CFO Zaf Mahomed says that Cell C will continue to focus on its turnaround and network strategy with the confidence that the deal will be delivered this year.

Cell C is expected to update the market in the first week of October.