Cell C set for ratings upgrade

A big restructuring at Cell C, which would see the company's debt reduced by more than half, to less than R8bn, may soon result in it receiving a ratings upgrade from Standard & Poor's.

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In a note published on Tuesday, the ratings agency said it has placed its "B-" long-term rating on Cell C on "CreditWatch with positive implications".
At the same time, it has placed its "B-" issue rating on the company's senior secured debt on "CreditWatch positive".

"The CreditWatch placement is based on the potential debt reduction that could occur if Blue Label Telecoms and Cell C staff acquire 35% and 30% stakes, respectively, in Cell C. Oger Telecom - which would retain the remaining 35% stake through 3C Telecommunications - aims to reduce Cell C's debt to R6bn-R8bn from its current level of about R17bn."

The agency said that if debt is reduced to the lower project levels, it could result in the adjusted debt to Ebitda (earnings before interest, tax, depreciation and amortisation) ratio improving to less than four times.

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