Cell C defaults on repaying interest on R2.7bn loan
JOHANNESBURG - Blue Label Telecoms, a 45% shareholder in Cell C, South Africa’s troubled mobile operator is down 12 percent on the JSE at R2.80 a share after it announced that Cell C had defaulted on repaying interest on an R2.7 billion loan.
Blue Label said in a statement today that Cell C had notified its noteholders that is had defaulted on the payment of interest on its $184 million (R2.7bn) note which was due in December 2019 as well as interest and capital repayments related to the respective bilateral loan facilities between Cell C and Nedbank , China Development Bank Corporation, Development Bank of Southern Africa Limited and Industrial and Commercial Bank of China Limited which was due in January 2020.
“Currently, none of the bilateral loan facilities have been accelerated as noteholders are aware and support that Cell C is committed to resolving the situation by agreeing to restructuring terms with its lenders while it also continues to work proactively with all stakeholders to improve its liquidity, debt profile and long-term competitiveness,” Blue Label said.
Cell C’s said later that the suspension of payments as part of the wider Cell C initiatives to improve liquidity and to restructure the company’s balance sheet.
“Cell C continues to work proactively with all stakeholders to improve its liquidity, debt profile and long-term competitiveness as part of its turnaround strategy,” Cell C said.
It said the S&P Global status on certain loan facilities and senior secured bonds remains unchanged at D (Default).