Picture: CELL C
Picture: CELL C

Cell C plans to raise as much as $464m from the sale of two bonds as part of its recapitalisation that will enable Blue Label Telecoms to buy a stake, according to two people familiar with the matter.

On Wednesday, Blue Label’s shareholders voted overwhelmingly for the proposed 45% acquisition of Cell C.

SA’s third-largest wireless carrier will sell $184m of three-year senior secured bonds and $280m of five-year securities, according to the people. Both notes would pay a coupon of 8.625%, they said.

The bonds would be used to repay Cell C’s existing €400m debt due to mature in July 2018, the people said.

That will enable Dubai-based parent company Oger Telecom, which is owed most of the outstanding debt through affiliates, to exit the company and ease the completion of the reorganisation that will lead to Johannesburg-based Blue Label taking a stake.

The planned bond issues are expected to help Cell C complete the transaction with Blue Label almost two years after talks began. The agreement to sell a 45% stake for R5.5bn would initially reduce Cell C’s debt by 73% without having to reapply for an operating licence, people familiar with the matter said last month.

With Thabiso Mochiko

 

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