Struggling mobile phone operator Cell C has raised R3.26 billion ( €240 million) by selling bonds to global investors.
These new bonds have an identical maturity date, of July 2018, and coupon, of 8.625%, as the existing Euro issuance.
The cellular operator said the original principal amount sought was upsized as a result of strong investor appetite. Despite this increase, the offering was still oversubscribed.
The firm said the proceeds will be utilized to fund Cell C’s capital expenditure and cash requirements in furtherance of its business strategy.
“I am delighted that we have closed such a significant public debt issuance. This is a further sign of the tremendous confidence our bond investors have in our strategy, which has been underpinned by a strong turn around 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,” said Cell C CEO Jose Dos Santos.
These new notes will supplement approximately €160m of first priority senior secured notes already in issuance, taking the total amount in issuance to €400m.
The successful offering was arranged by MedInvestment Bank SAL, Bankmed SAL and MedSecurities Investment SAL.
Cell C is in a process of investing R8 billion over the next three years to build its LTE network that will see high-speed broadband technology brought to its customers in targeted areas across the country.
“Our LTE strategy will be focused and strategic, targeting metropolitan areas where people work and live. The primary commuting areas that fall outside the major metros will remain covered by HSPA+,” said Dos Santos.
South Africa’s third mobile phone operator has signed supply agreements with both Huawei and ZTE, which are it’s primary partners in the rollout of LTE and entails the rollout of more than 4000 LTE sites.
The first targeted areas for LTE rollout will be in Gauteng, KwaZulu-Natal and the Western Cape.
“Gated communities and high-density residential areas where there is a great demand for high speed data will be one of our priorities.”