JOHANNESBURG, Feb 27 (Reuters) - South Africa’s Cell C and its creditors have agreed a deal with Blue Label Telecoms and an unnamed investor that would lower the mobile phone firm’s debt to 6 billion rand ($463 million), Blue Label said in a statement.
Cell C is South Africa’s third largest mobile phone company but a debt burden of about 20 billion rand has hampered its growth in a maturing phone market where rivals Vodacom and MTN are much bigger.
Blue Label, the largest distributor of pre-paid airtime and data in South Africa, agreed last year to pay 5.5 billion rand for a 45 percent stake in Cell C and said it would lead the company’s recapitalisation plan.
Blue Label said on Monday that its stake in the firm would remain unchanged even though the unnamed investor in the deal to lower Cell C’s debt would be taking 15 percent.
“The third party investor is to subscribe for 15 percent of the share capital of Cell C for 2 billion rand,” Blue Label said.
Shares in Blue Label were up 5.6 percent at 18.80 rand by 1231 GMT.
“The restructuring agreement addresses the over-geared balance sheet of Cell C and will unlock further improved and exciting performance,” Cell C said in a statement. ($1 = 12.9525 rand) (Reporting by TJ Strydom; editing by David Clarke)