Cell C lenders have voted in favour of a compromise cash out offer of 20c for every R1 of debt, bringing the company's recapitalisation closer to fruition, it was announced on Tuesday.
Cell C's described the latest development as a "critical milestone in the financial restructuring and recapitalisation" of its business.
The company's major shareholder, Blue Label Telecoms, now expects the recapitalisation process to be finalised by late July.
Cell C and its shareholders have over the past two years been working on the cash injection plan for the operator which was hit by liquidity challenges that saw Blue Label, which owns a 45% stake in the firm, write down the carrying value of its Cell C investment to zero.
The company is saddled with a debt of around R7.3 billion.
"This is a significant step in the overall process to deleverage Cell C’s balance sheet," Cell C Douglas Craigie Stevenson about the development.
"It shows confidence in our new business strategy and with the overall debt reduced and simplified - we are set to compete as a sustainable entity going forward."
Blue Label had earlier announced that some of Cell C's lenders would convert their loans into shares in Cell C, as part of the recapitalisation plan. Blue Label will also buy Cell C's pre-paid airtime for an amount of R1.2 billion, to help inject capital into the cellphone service provider.
Cell C said the final steps to concluding the overall transaction involve the signing of condition precedents and long form agreements, adding "this is expected to be concluded in a matter of weeks."
Blue Label said the final stages of the overall Cell C recapitalisation transaction are being implemented, and the process is expected to reach a final close in late July 2022.
In January 2020, Blue Label Telecoms announced that the network provider had defaulted on interest and capital repayments related to the respective bilateral loan facilities between Cell C and Nedbank, China Development Bank Corporation, the Development Bank of Southern Africa and the Industrial and Commercial Bank of China, which were due in January 2020.
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