CELL C COMPLETES FINANCING PLAN

Mergers, Acquisitions and Financial Results

Cellular network operator Cell C has entered into a three-year R500 million revolving credit facility with Nedbank.

This completes a financing plan for the smallest of the country's three network operators that includes the issuing of two tranches of high-yield bonds to overseas investors worth a total of R5.6 billion.

Jonathan Newman, advisor to Cell C chairman Talaat Lahman, previously said this revolving credit facility with Nedbank was part of the plan to restructure the company's debt and position itself for future projects. The main purpose of this facility is to help with operational expenditure.

A corporate finance analyst at another major commercial bank says the financing structure has helped Cell C put its previous debts in order in a manageable format.

“However, the group remains heavily geared and will have to do a lot of work to meet its bond repayment obligations. This means it will have to expand its subscriber base or start finding other revenue streams,” he says.

Cell C is still to announce the signing of its joint venture with UK group Virgin in which Virgin will operate as a virtual network operator.

"Our successful high-yield bond issues and the conclusion of this significant facility with Nedbank demonstrate our sound financial position and strong growth prospects," says Muhieddine Ghalayini, Cell C's CFO.

http://www.itweb.co.za/sections/financial/
2005/0509161037.asp?S=Financial&A=FIN&O=FRGN