Cell C said yesterday its meeting to vote on a plan to deal with some of its debt had been adjourned until July 5, but the majority of votes on Monday gave the scheme the green light.
Cell C held the meeting for its $184 million (R2.9 billion) of bonds which were due in 2020, but which it had not yet paid. The group owes some R7.3bn in total.
Its liabilities, however, exceed its assets and it has defaulted on debt with bondholders. The group, which has more than 16 million subscribers, has devised a recapitalisation and operational turnaround strategy, and an operating profit was reported for the last interim period versus a substantial loss the year before.
Cell C was first recapitalised with R5.5bn by Blue Label Telecoms, which owns 45 percent of Cell C and is the largest shareholder, in 2017. In terms of the latest plan, The Prepaid Company (TPC), a subsidiary of Blue Label Telecoms, will loan the mobile operator up to R1.46bn.
Cell C will use this to settle secured lenders’ claims by paying an initial 20c to the rand owed.
Cell C said yesterday that the meeting on Monday was adjourned as a large noteholder tendered their instructions after the specified voting deadline on June 16. However, only a 25 percent quorum will apply at the adjourned meeting versus 75 percent at the Monday meeting.
In Monday’s meeting, noteholders representing 92.18 percent of the votes had indicated they would support the extraordinary resolution required to implement the plan.
“The two-week delay in the noteholder vote has no impact on the timing of the overall Cell C recapitalisation transaction, which is expected to proceed to final close in the month of July 2022,” Cell C said yesterday.
Cell C chief executive Craigie Stevenson told Business Report last week: “The restructuring and refinancing of Cell C has been long and complicated. We are pleased to be closer to concluding a transaction that will deleverage the balance sheet and provide the required working capital to operate and grow the business.”
He said the business had been streamlined in terms of a clear strategy, and the network model would reduce network expenses and capital expenditures, while also allow the group to access best-in-class infrastructure.