Cell C debt deal delayed until July

Cell C debt deal delayed until July

The debt issues surrounding South African operator cell C are no closer to resolution, although the debtors’ meeting that we reported had been postponed has now been rescheduled.

A number of South African news sites are reporting that there will be a two-week delay in the noteholder vote to approve an extraordinary resolution on a compromise offer relating to Cell C’s debt.

Cell C’s priority creditors were due to vote on whether they will consent to the offer of 20c for every rand of debt – an 80 percent loss – during the meeting of noteholders on June 20. This vote was postponed because, apparently, it did not meet the quorum requirements.

The adjourned meeting, now due  to take place on 5 July, is to have a reduced quorum requirement: one or more persons must be present holding or representing at least 25% in principal amount of the notes.

Despite the confusion shareholders have been assured that the changed meeting time will have no impact on the overall Cell C recapitalisation, expected to close next month.

Cell C has not been able to pay its debts, and, according to the MyBroadband website, should the recapitalisation not succeed it is not expected to survive. The company has to restructure R7.3 billion (about US$456.7 million) in debt. Despite this uncertainty it has announced plans to deploy 5G.

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