CellC recapitalization

[Paul Hjul]

Cell C recap plan announced - all the details - TechCentral

Blue Label Telecoms has unveiled long-awaited details of a planned recapitalisation of Cell C - a move aimed at dealing once and for all with the mobile operator’s crippling debt problem.

techcentral.co.za

Looks like they've pulled it off. Details as to whether they have funds to secure additional spectrum is missing. Blue Label have certainly taken their bath on this one but kudos on the team at CellC who've managed to get this far

 

[Düber]

Unless I'm missing something (and most probably have) this sounds like they are shuffling credit cards.

 

[Paul Hjul]

Unless I'm missing something (and most probably have) this sounds like they are shuffling credit cards.

Sort of, but think of it more like this.
CellC had a bunch of credit cards that have a fuckton of fees and interest due. They had some store credit and they like as well.

Now they are having those credit cards closed and the credit card companies taking a bath on the balance (20c on the rand owed). Paid for by a new credit card but it's (a) consolidated and (b) the debt is slashed by 4/5ths (granted 4/5ths of claimed and with interest and penalties etc...). That consolidated credit card still have some more credit which they can use.

The credit card companies can if they want instead of getting their 20c keep the card open and be owed the 20c on the rand and remain invested in the company.

I genuinely think that the management team of CellC are able with this to repurpose the company.

 

[Paul Hjul]

Some more context here:

CellC will if (and fair disclaimer I am engaged in litigation that will if successful see the ITA set aside) the auction stands be only paying 280 odd million rand on additional spectrum. With that additional spectrum it will be a minor spectrum player but it has spectrum in each "layer of the cake" that 5G operations require. Telkom has paid over 1.5 billion to get the spectrum in sub Ghz that it needs (and which CellC has). So all and all on CellC's book if you clean down debt and are using commercial agreements with MTN and Vodacom what you have is a company worth its spectrum holdings, spectrum holdings easily worth 2.5bn rand.

This outcome is good for Blue Label even if its suboptimal for consumers

 

[Ghost64]

Seems like a bit of a waste, a money pit.
Whats their plans for top management restructure?

 

[Paul Hjul]

Seems like a bit of a waste, a money pit.
Whats their plans for top management restructure?

what do you mean? Top management of CellC? That was restructured at least 2 years ago. Top management of The Prepaid Company? Or Blue Label?

CellC's current "top management" is very different from some years back. I don't think I've ever interacted with Stevenson but throughout his tenure getting the bleeding to stop has been done quite well. Here is the companies leadership: https://worldofcellc.co.za/leadership
Met Schalk Visser through the conference circuit - spoke on successive panels I think - (and have him as a LinkedIn connection) and am in email swamp with Zahir Williams (CellC haven't engaged legal representatives in the spectrum suit so he gets all of the papers exchanged). A lot of deadweight in the organization have left or died

(Fair disclosure: Crystal Web had a commercial agreement with CellC that I carefully negotiated the drafts of only to have a then executive of CellC return on a take it or leave it basis an agreement. As this agreement contained an exit loop and if implementable would have been sufficient I entered into the agreement. The plan was bungled (primarily be functionaries at Crystal Web - the CellC agreement came in shortly before I was out of operations at CW, but also some tardiness of CellC) both CW and I were threatened with ruinous litigation by same senior executive. An exchange later with the legal department and both parties exited the contract