The process aimed at recapitalizing Cell C hit a snag this week after a large lender failed to meet a deadline for the submission of instructions, the company announced on Tuesday.
The late submission by the significant holder, which the company did not mention, forced the meeting, at which lenders were expected to vote on a so-called compromise offer for the recapitalization, to be postponed to July 5.
The meeting was originally set for 20 June.
Cell C further stated that the noteholder tendered the necessary instructions after the specified voting deadline on 16 June, which meant that the meeting was not quorate and had to be adjourned.
In the meeting, bondholders are required to legally indicate their consent to the offer of 20c for every R1 of debt by means of a vote. A majority of at least 75% of the vote in favour of the offer is necessary for it to be implemented.
“We believe that the requisite quorum and a majority vote in favour will be achieved, making this another critical milestone in Cell C’s financial restructuring and recapitalisation,” said CEO Douglas Craigie Stevenson.
A majority of noteholders have already presented their instruction, which are expected to remain in place until the adjourned noteholder meeting.
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The company stated that the final step to conclude the overall transaction is the signing of the condition precedent and long form agreements and is expected to be finalised in a matter of weeks.
Cell C has a debt burden of around R7.3 billion and its recapitalisation plan has been on the cards for over two years.
Blue Label Telecom, which owns a 45% stake in Cell C, has previously described the company’s recapitalisation as “highly complex” and involves a number of interested parties.
In May 2019, Blue Label wrote down the carrying value of its Cell C investment to zero, as the company sank deeper into financial crisis.
Source: News 24
