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.<\/p>\n
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.<\/p>\n
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.<\/p>\n
Former bond and debt holders supported the restructure of the debt in Cell C, it said.<\/p>\n
Blue Label Telecoms now holds 45% in Cell C, 3C Telecommunications 30%, Net1 15% and 10% on behalf of Cell C management and staff.<\/p>\n
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.<\/p>\n
Cell C management and staff now have the opportunity for the first time to participate in the equity of the company, it said.<\/p>\n
\u201cWe 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,\u201d said Dos Santos.<\/p>\n
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\u2019s operational and commercial activities.<\/p>\n
“If you include future substantial investments planned by Cell C, further economic stimulation will also flow from this recapitalisation,” said Dos Santos.<\/p>\n
“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.<\/p>\n
“Cell C now has a sustainable capital structure to deliver on the group\u2019s strategic objectives to improve financial returns from increased network utilisation, upgrade network infrastructure and expand LTE coverage,” Cell C said.<\/p>\n
The company is in the process of completing the necessary regulatory notifications.<\/p>\n