Cell C secures needed funding

Cell C has largely secured its capital expenditure funding for at least the next seven months, says chief strategy officer Robert Pasley.

Cell C has largely secured its capital expenditure funding for at least the next seven months, according to chief strategy officer Robert Pasley.

“We are running a process with the [infrastructure] vendors and … been successful in obtaining a degree of funding support from both ZTE and Huawei.

“Having said that, we’re in the process of closing other facilities, which, when combined with the existing arrangements with ZTE and Huawei, will enable us to satisfy our [capital expenditure] funding requirements through to early 2019,” Pasley said on Thursday.

Cell C planned to spend close to R3bn on capital expenditure in 2018 and R2.5bn in each of 2019 and 2020.

The mobile operator’s debt was downgraded by S&P Global Ratings in early May. S&P said while the company had performed in line with expectations, it could soon face a liquidity shortfall if it failed to secure additional funding.

Beyond the mobile operator’s short-term capital expenditure requirements, “the broader financing process is still [ongoing]”, Pasley said.

Cell C’s chief financial officer, Tyrone Soondarjee, announced his retirement on Thursday. He said he planned to “join [his] family business on a full-time basis”. Soondarjee will leave the company at the end of May after less than a year in the job.

Pasley, a former Cell C finance chief, said he would take responsibility for “the funding and financing side of the role”.

Chief operating officer Douglas Craigie Stevenson “is going to take responsibility for the financial operations of the business, during an interim phase”, Pasley said.

Cell C and its largest shareholder, JSE-listed Blue Label Telecoms, held a conference call on Thursday to explain Cell C’s accounts, including its off-balance sheet debts.

Blue Label and Net1 bought 45% and 15% of Cell C, respectively, in a recapitalisation deal finalised in 2017.