South Africa’s third largest mobile operator Cell C has secured financial backing of US$572m, split between a US$350m equity investment from parent Oger Telecom and a R2.2bn (US$222m) loan from Nedbank and DBSA.
The company explained in a statement…
South Africa’s third largest mobile operator Cell C has secured financial backing of US$572m, split between a US$350m equity investment from parent Oger Telecom and a R2.2bn (US$222m) loan from Nedbank and DBSA.
The company explained in a statement that the cash injection follows an announcement from the Independent Communications Authority of South Africa (ICASA) in June about addressing the high cost to communicate in the country.
Cell C CEO Alan Knott-Craig said that ICASA’s announcement “has bolstered our shareholders’ confidence in the future of Cell C and the industry.”
He also said that the equity injection will strengthen the company’s balance sheet but added that “Cell C needs aggressive and proactive regulatory support to continue its drive to reduce the cost to communicate in South Africa and remain sustainable in the process”.
Cell C had already received US$200m from Dubai-based Oger Telecom last year and a further significant investment is scheduled for 2014, the company said.
As for the R2.2bn long-term financing package, the operator stated that the transaction has been arranged Nedbank and carries partial guarantees from Oger Telecom “in a further indication of its support,” according to Knott-Craig, who joined the company last year.
Cell C lags behind Vodacom and MTN in terms of subscribers in the South African mobile market. It is 75%-controlled by Oger Telecom and its subsidiaries and the remaining 25% by Black Economic Empowerment entity CellSAf.
