Cell C said it’s refinanced R1.4bn of debt on better terms with loans from its biggest shareholder and a consortium of banks as the South African wireless carrier considers a listing in 2020.
South Africa’s third-largest operator is also in talks with vendors including Huawei for an additional facility of R1.4bn to fund capital expenditure, a company representative said by email in response to questions.
Cell C emerged last year from a protracted debt-restructuring rescue plan with Blue Label Telecoms taking a 45% stake. That restructuring reduced Cell C’s debt by two-thirds to less than R6bn, but much of the remainder was still funded at onerous terms with interest rates as high as 17%.
Better terms and new financing will help Cell C improve its results, which have been burdened by high interest-rate payments. In turn, those results have hit Blue Label Telecoms’s shares, which have dropped almost 70% since it took the stake in Cell C.
Cell C, which competes with MTN [JSE:MTN] and Vodacom [JSE:VOD] in South Africa, is planning to sell shares in Johannesburg by the first quarter of 2020 to fund acquisitions, chief executive officer Jose Dos Santos said August 21.
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