Cell C to ask bondholders for debt extension

South African mobile operator Cell C said that it would extend the maturity date of Euro 160 million of senior debt. As a part of the transaction, Cell C has offered to buy back debt from any bond holder who does not wish to extend. The expected extension is further confirmation of the confidence that funders have in the future of Cell C and will enable Cell C to continue to invest heavily in its network infrastructure in support of its business plan.

Jose Dos Santos, Cell C CEO stated that: “The extension will allow Cell C to channel equity and cash generated in the business to increase its capacity to continue to grow the company.”

Cell C also reported Year-on-Year service revenue growth of 10.5% for Quarter 2 2014 driven by reported subscriber growth of 59% to 18.1m at 30 June 2014.

According to Businesstech.co.za, in 2013, the group received an injection of R5.7 billion from Oger Telecom, the Lebanese-controlled firm with an indirect 75% holding in the SA operator, and other stakeholders.

Oger invested $350-million (around R3.5 billion) and key lenders “including Nedbank and the Development Bank of South Africa” provided R2.2 billion.

Former CEO Alan Knott-Craig warned at the time, though, that the group’s coffers may stop investing under the current regulatory framework.

“Essentially it goes around MTRs (mobile termination rates)…and the second thing is symmetry,” he said in a statement to businesstech.