‘We will drive down costs further’: Cell C CEO
Cell C chief executive officer, Jose Dos Santos, says the company will “reinvigorate” competition in the market, and is in a position to drive down costs following a recapitalisation of the business.
The recapitalisation, the operator said, reduces the net debt of Cell C to no more than R6 billion which includes $184 million of bonds which are fully hedged into South African rand.
The restructuring was made possible by a subscription for shares from Blue Label Telecoms of R5.5 billion and a further subscription from Net1 for R2 billion.
Former bond and debt holders supported the restructure of the debt in Cell C, it said.
Blue Label Telecoms now holds 45% in Cell C, 3C Telecommunications 30%, Net1 15% and 10% on behalf of Cell C management and staff.
The ownership of the company by South African shareholders has increased from 25% to over 86% and the participation of historically disadvantaged persons in Cell C increases from around 25% to more than 30% at ownership level.
Cell C management and staff now have the opportunity for the first time to participate in the equity of the company, it said.
“We are delighted to have concluded this two-year long process for the benefit of all our stakeholders. The recapitalisation provides a sustainable growth platform for Cell C that will promote healthy competition in the South African telecom market to further drive down costs and improve our value offerings,” said Dos Santos.
The recapitalisation, the company said, secures the employment of some 2,500 full-time employees of Cell C and a further 15,000 people that are employed in the industry value chain as a result of Cell C’s operational and commercial activities.
“If you include future substantial investments planned by Cell C, further economic stimulation will also flow from this recapitalisation,” said Dos Santos.
“Competition in the telecommunications industry is vital to bringing down prices, including data prices, and under the new significantly reduced debt structure, Cell C is confident, that because of this transaction, the company can reinvigorate competition in the market.
“Cell C now has a sustainable capital structure to deliver on the group’s strategic objectives to improve financial returns from increased network utilisation, upgrade network infrastructure and expand LTE coverage,” Cell C said.
The company is in the process of completing the necessary regulatory notifications.
Read: Cell C plans to raise R6 billion as it seeks to pay off debt amid a takeover
Loading ...