Cell C Rescue Transaction Postponed

Blue Label Telecoms has notified shareholders that the completion of the recapitalization of Cell C is being delayed.

“Some binding detailed agreements are not yet in final form and are in the process of being finalized,” Blue Label said in a statement.

“While the final stages of the recapitalization process are progressing well, some delays have meant that the deal is due to close by the end of August 2022.”

Early last month, Blue Label said the deal was due “at the end of July.”

This comes after Cell C secured creditors voted to cut their debt by 80% — a compromise cash-out offer of 20 cents per R1.

Cell C has failed to pay its debts and must restructure R7.3 billion to survive.

Of this amount, US$184,002,000 (R2.95 billion) were senior collateralized bonds that Cell C issued and which were publicly listed.

These bondholders had to vote to accept the haircut.

At least 75% of the votes controlled by senior secured bond debtors must approve the transaction, which will be binding on all bondholders.

The promissory note holders’ meeting took place on 5 July, after being adjourned on 20 June for lack of a quorum, and the debtors voted in favor of a compromise.

The final steps to complete the recapitalization include the signing of preconditions and extended agreements.

Blue Label has previously stated that they are expected to be completed within a few weeks.

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