Blue Label Telecoms finalises recapitsalisation of SA’s mobile operator, Cell C

Information coming through to BusinessTech Africa is that Blue Label Telecoms says it has concluded the recapitalisation of Cell C. 
 
The recapitalisation process comes through a binding long-form agreement with the mobile operator, Cell C, and various financial stakeholders. 
 
Local media reports also indicate that in mid-2019, Cell C embarked on a turnaround strategy, which focused on operational efficiencies, thus reducing operational expenditure, and optimising traffic. 
 
This strategy included a move away from a capital-intensive build-and-own network model to an infrastructure sharing model which provides variable operational expenditure and is scalable, Blue Label noted. 
 
“Together with the recapitalisation of the current debt structure, it will result in a significant improvement of liquidity and ensure the long-term sustainability of Cell C,” it said in a statement on Thursday (22 September). 
 
BusinessTech has it that Cell C CEO Douglas Craigie Stevenson, said the priocess was the final and critical pillar of the company’s turnaround strategy. 
 
“The strategy and one of its pillars are deleveraging the balance sheet, providing liquidity to operate, and putting the company on a trajectory of growth and long-term sustainability,” he said. 
 
“We are immensely pleased and humbled to have received the support of our many stakeholders, in particular our shareholders, our infrastructure partners who showed belief in our new model, bought into the new business strategy, and supported the vision of the turnaround and our customers for their patience.” 
 
Stevenson stated that on day one post-recap, the mobile telecoms operator, Cell C will have achieved a significant reduction in the debt. 
 
“I can say with humility to all South Africans, Cell C is ready to invest in offering our customers great value – which has been a hallmark of our legacy for more than 21 years – but now we can also truly claim to have a quality network with access to more than 8,775 sites, 96% of which are LTE enabled as at end August 2022 and more to come by the end of 2023.” 
 
He said that in the short-to-medium term, Cell C will focus on the implementation of its network migration by the end of 2023 to get us to 14,000 sites. 
 
“It will also target the wholesale business, pursue its ambition to become a digital business, and build a high-performance culture with digital skillsets for employees,” reports the publication. 
 
“To facilitate the restructuring of Cell C’s debt owed to certain secured lenders totalling R7.3 billion (fixed as of November 2019), Blue Label will provide liquidity via a secured loan of R1.46 billion. 
 
“A portion of R1.03 billion of this debt funding will be used to pay out the secured lenders as per the accepted compromise offer of 20c for every R1 of debt.” 
 
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