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Johannesburg - South Africa’s third largest mobile network Cell C has raised €240m (R3.3bn) to fund the company’s capital expenditure and cash requirements.
The company made the announcement on Friday as it said the €240m issuance was completed in first priority senior secured notes.
Cell C added that the new notes are further planned to supplement about €160m of first priority senior secured notes already in issuance.
This brings the total issuance to €400m and Cell C said the new euro notes have an identical maturity date of July 2018 with an interest rate of 8.625%.
“I am delighted that we have closed such a significant public debt issuance,” said Cell C CEO Jose Dos Santos in a statement.
“This is a further sign of the tremendous confidence our bond investors have in our strategy, which has been underpinned by a strong turnaround in the company’s performance over the past 18 months. This issuance also reflects the company’s excellent track record of servicing its debt obligations,” added Dos Santos.
The announcement by Cell C comes after ratings agency Standard & Poor’s (S&P) earlier this month issued a warning over South African mobile operator Cell C’s R2bn unsecured debt.
In particular, S&P raised concerns over the unsecured debt having upcoming maturities in July. S&P also issued a warning regarding Cell C continuing to generate negative free operating cash flow.
However, S&P did note that backing from Cell C’s parent company, Saudi Arabia’s Oger Telecom, could help the South African telecoms firm deal with its debt.
Cell C is South Africa’s third largest mobile network with just over 20 million subscribers.
The company has been aggressively targeting winning over market share. This year, for example, it’s offering to pay up to R10 000 to buy postpaid customers out of their contracts with rival networks.
