Blue Label Telecoms Tuesday (21 June) published a note on SENS, updating shareholders on mobile operator Cell C’s bond process – crucial to its financial restructuring.
The telco said that a scheduling error over a vote by bondholders to indicate their consent to the offer of 20 cents for every R1 of debt, has been postponed. A majority of at least 75% of the vote in favour of the offer is necessary for it to be implemented.
Cell C’s restructuring is crucial for its survival, currently owing in excess of R7.3 billion in debt.
“The meeting “noteholder meeting” of Cell C’s secured lenders, who formerly held publicly listed bonds or notes to get approval on the “compromise offer” of 20 cents for every R1 of debt, will now take place on 5 July 2022,” the mobile operator said.
“The quorum for holding a valid noteholder meeting requires one or more persons present and holding or representing at least 75% in principal amount of the notes. A large noteholder tendered the necessary instructions after the voting submission deadline on 16 June, which meant that the noteholder meeting originally scheduled for 20 June 2022 did not meet the quorum requirements and had to be adjourned to a new date – 5 July 2022.”
“A reduced quorum requirement of one or more persons present and holding or representing at least 25% in principal amount of the notes now applies to the adjourned meeting. A majority of noteholders have already presented their instructions for the noteholder meeting.”
These instructions, Cell C said, are expected to remain in place until the new noteholder meeting and are sufficient to achieve the reduced quorum requirements. The outcome of the noteholders meeting will be communicated, it said.
“We believe that the requisite quorum and majority vote in favour will be achieved, making this another critical milestone in Cell C’s financial restructuring and recapitalisation,” said Douglas Craigie Stevenson.
The final step to conclude the overall transaction is the signing of CP’s and long form agreements and is expected to be finalised in a matter of weeks, he added.