JOHANNESBURG – The financial woes facing embattled mobile operator Cell C mounted on Thursday after rating agency S&P Global Ratings lowered the company's rating to default.
The rating agency's move came after Cell C failed to make about R194 million in interest payments due last month.
S&P said it considered both the missed payments and suspension of future payments as a general default.
"It also reflects our expectation that the company will not make these payments within the 30-day grace period due to its decision to suspend future payments," S&P said in a statement.
"We believe there is an increased likelihood that Cell C will be unable to repay all or substantially all of the obligations as they come due unless it is able to restructure its debt and recapitalise its balance sheet."
Cell C said in a statement that the suspension of interest payments in July was part of the wider Cell C initiative to improve liquidity and to restructure the company’s balance sheet.
Cell C chief executive Douglas Craigie Stevenson said the company continued to work proactively with all stakeholders to improve its liquidity, debt profile and long-term competitiveness as part of its strategic roadmap.
”We are committed to simplifying the business model, right-sizing and optimising the business. We have engaged with S&P throughout this process and believe we are on the right track with the transactions currently being finalised," Stevenson said.