Cell C wants to cut debt by sell­ing stake

The Star Early Edition - - BUSINESS REPORT -

CELL C wants to cut its debt by 73 per­cent as part of a deal that will help the com­pany sell a stake to Blue La­bel Tele­coms while re­tain­ing its op­er­at­ing li­cence, ac­cord­ing to two peo­ple fa­mil­iar with the mat­ter. The pro­posed trans­ac­tion will see Cell C split about R9 bil­lion of bor­row­ings into three spe­cial pur­pose ve­hi­cles (SPV), said the peo­ple, who asked not to be iden­ti­fied be­cause the talks are pri­vate. Along­side stake sales to Blue La­bel and pay­ment ser­vices provider Net1 UEPS Tech­nolo­gies Inc, the plan will cut the over­all debt to R6bn from about R22bn, they said. The SPVs will take on debt held by South Africa’s Nedbank Group, a group of Chi­nese len­ders, and a €400 mil­lion bond is­sued by Cell C that ma­tures in July next year, they said. In ex­change, the ve­hi­cles will con­trol a com­bined 30 per­cent stake in Cell C. The pro­posal is the lat­est at­tempt by Cell C to push through the sale of a 45 per­cent share­hold­ing to Blue La­bel for R5.5bn, a deal agreed in Oc­to­ber af­ter al­most a year of talks. Cel­lSAf, which is black-con­trolled and owns 25 per­cent of Cell C, ar­gues such a trans­ac­tion would un­fairly di­lute its share­hold­ing and goes against black eco­nomic em­pow­er­ment. Cell C de­clined to com­ment. – Bloomberg

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