Africa Cellular Towers makes funding headway

Africa Cellular Towers, the struggling JSE-listed provider of telecommunication infrastructure, says it has reached an agreement for the restructuring of funding from the Industrial Development Corporation (IDC).

However, it also noted that a creditor served a liquidation application against the group on 14 May 2012.

“The company is seeking legal advice in regard to these proceedings and a further announcement will be made in this regard,” it said in a statement on Wednesday (16 May).

“Shareholders are advised that agreement in principle was reached between the company and the IDC in terms of which the IDC would restructure its funding line of R99 million subject to certain conditions precedent and more specifically that the company secure an equity partner to underwrite a rights issue,”  ACT added.

The company said it has received a letter of intent from a funder to underwrite a rights offer to the extent of R7.5million and the final decision by the IDC Credit Committee regarding the restructuring of its funding is expected by 25 May 2012.

“If successfully concluded, the restructuring will provide the company with additional working capital of R51 million,” it said.

Directors of Africa Cellular Towers are considering the implementation of a rights offer after the finalisation of the restructuring of the IDC funding.

“As part of the IDC funding and the rights issue the company will enter into discussions with the secured and concurrent creditors for the purpose of restructuring the Balance Sheet of the company,” it said.

The group said that the above matters are all inter-dependent and it anticipates that they will be resolved by 28 May 2012.

In December, ACT said that, despite an extensive turn-around process and debt funding from the Industrial Development Corporation (IDC) to R99 million – macro-economic factors, and continued depressed trading conditions, negatively impacted on its results for the six months ended August 31, 2011 – which failed to meet the board’s expectations.

ACTowers noted that its cellular towers division had been successful over the reporting period in securing some contracts within South Africa as well as Ghana, “but not to the levels previously reported”.

Revenue climbed to R109.2 million, while the group recorded a trading loss of R47.6 million.

 

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Africa Cellular Towers makes funding headway