Blue Label has concluded a non-binding term sheet with Cell C and various Cell C financial stakeholders, whereby Cell C will be restructured and refinanced.
The purpose of this is to deleverage Cell C’s balance sheet, providing it with liquidity with which to operate and grow its businesses and to position itself to achieve long term success.
Cell C has implemented a turnaround strategy, focusing on operational efficiencies, reducing operational expenditure and optimising traffic.
This includes a significant reduction in capital expenditure and a conversion of a fixed cost infrastructure based network to a variable operational expenditure model.
This, together with the recapitalisation of the current debt structure, will result in a significant improvement of its liquidity and ensure the long term sustainability of the company.
From a Blue Label perspective, the recapitalisation of Cell C, together with the benefits to be derived from Cell C’s turnaround strategy and its sustainability, will enhance the value of its investment and restore its shareholder value.
Blue Label has also withdrawn its cautionary announcements.