Plan for re­cap­i­tal­i­sa­tion from bonds

The Star Early Edition - - COMPANIES -

CELL C PLANS to raise as much as $464 mil­lion (R6.04bn) from the sale of two bonds as part of the mo­bile-phone com­pany’s re­cap­i­tal­i­sa­tion that will en­able Blue La­bel Tele­coms to buy a stake, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter. The coun­try’s third-largest wire­less car­rier will sell $184m of three-year se­nior se­cured bonds and $280m of five-year securities, ac­cord­ing to the peo­ple, who asked not to be iden­ti­fied as the plans aren’t pub­lic. Both notes will pay a coupon of 8.625 per­cent, ac­cord­ing to the peo­ple. Cell C spokes­peo­ple didn’t im­me­di­ately re­spond to e-mails re­quest­ing com­ment. The bonds will be used to re­pay Cell C’s ex­ist­ing €400 mil­lion (R6.06bn) debt due to ma­ture in July 2018, the peo­ple said. That will en­able Dubai-based par­ent com­pany Oger Tele­com, which is owed most of the out­stand­ing debt through af­fil­i­ates, to exit the com­pany and ease the com­ple­tion of the re-or­gan­i­sa­tion that will see Jo­han­nes­burg-based Blue La­bel take a stake. The planned bond is­sues are ex­pected to help the wire­less car­rier com­plete the trans­ac­tion with Blue La­bel al­most two years af­ter talks be­gan. The agree­ment to sell a 45 per­cent stake for R5.5bn will ini­tially re­duce Cell C’s debt by 73 per­cent with­out hav­ing to re-ap­ply for an op­er­at­ing li­cence. – Bloomberg

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