Cell C concludes recapitalization – Featured Durban Blog

Cell C concludes recapitalization:

Cell C today announced it has concluded the recapitalisation of the company. The recapitalisation reduces the net debt of Cell C to no more than R6 billion which includes USD184 million of bonds which are fully hedged into South African Rand. The recapitalisation was made possible by a subscription for shares from Blue Label Telecoms of R5.5 billion and a further subscription from Net1 for R2.0 billion. Former bond and debt holders supported the restructure of the debt in Cell C.

At the close of the transaction Blue Label Telecoms holds 45% in Cell C, 3C Telecommunications 30% (in turn held as 29.4% by the Employee Believe Trust, 45.6% by Oger Telecoms and 25% by broad-based black empowerment grouping CellSAf), Net1 15% and 10% on behalf of Cell C Management and Staff.

The ownership of the company by South African shareholders has increased from 25% to over 86% and the participation of historically disadvantaged persons in Cell C increases from around 25% to more than 30% at ownership level.

Cell C management and staff now have the opportunity for the first time to participate in the equity of the company.

“We are delighted to have concluded this two-year long process for the benefit of all our stakeholders. The recapitalisation provides a sustainable growth platform for Cell C that will promote healthy competition in the South African telecom market to further drive down costs and improve our value offerings,” said Jose Dos Santos, Cell C Chief Executive Officer.

The recapitalisation secures the employment of some 2500 full-time employees of Cell C and a further 15 000 people that are employed in the industry value chain as a result of Cell C’s operational and commercial activities.

The completion of this transaction promotes the business and consumer confidence needed to lay and support the foundation for business recovery in South Africa. This at a time when South Africa is facing an economic recession and the national imperative is to save and create as many jobs as possible. “If you include future substantial investments planned by Cell C, further economic stimulation will also flow from this recapitalisation,” added Dos Santos.

“We would like to thank our incoming shareholders for their commitment to seeing through this long process and securing a healthy future for Cell C. Secondly, I would like to thank our longstanding shareholders in 3C Telecommunications for their support during this process and throughout Cell C’s history,” said Dos Santos.

Competition in the telecommunications industry is vital to bringing down prices, including data prices, and under the new significantly reduced debt structure, Cell C is confident, that because of this transaction, the company can reinvigorate competition in the market.

Cell C now has a sustainable capital structure to deliver on the Group’s strategic objectives to improve financial returns from increased network utilisation, upgrade network infrastructure and expand LTE coverage.

The company is in the process of completing the necessary regulatory notifications.

The post Cell C concludes recapitalization appeared first on Sharks Rugby.

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