Cell C recently announced a proposed restructuring of the company’s capital that will reduce net debt to R8 billion or less when implemented.
As part of the deal, Blue Label Telecoms will buy a 35% stake in Cell C for R4 billion, while its current shareholder 3C Telecommunications will also put money into the company to reduce debt.
The company’s debt will be reduced further over the next 12 months, and will also be refinanced in rand.
Interesting news is that Cell C management has submitted a binding offer which will see employees hold around 30% of the total issued share capital in Cell C at a cost of R2.5 billion.
Many people asked how this staff share scheme will work, and MyBroadband spoke to Cell C for clarity.
The company explained that Cell C staff will receive shares for a discount of around 25% on the market value of the company.
Cell C has already raised some of the R2.5 billion needed for the staff share scheme, and is likely to raise the rest from a local debt provider.
After the effective date of Cell C’s restructuring of 1 June 2016, the shares will be held in a trust and managed on behalf of Cell C employees.
The shares will be held for 4 years before Cell C employees will be able to benefit from the scheme.
This will not have any influence on Cell C’s employees’ salaries, bonuses, or annual salary increases.
The company’s growth over the four years will determine the benefit which the employees will receive from the scheme. This should incentivize them to grow the company.
It is understood that many Cell C employees have already moved their family and friends onto Cell C’s network, and the share scheme should encourage more of this behaviour.
