Cell C landlord’s R42 million headache

Cell C is in the process of paying its landlord, Attacq, R41.7 million in rent debt, which is only 30% of the outstanding amount it owes.

This comes after Attacq agreed that only 30% of Cell C’s outstanding rental debt would be settled to minimise its expected credit loss.

Now, Cell C must pay back the R41.7 million by the end of December 2026, with the amount bearing interest of 6% a month.

This was revealed in Attacq’s latest results for the year ended 30 June 2025, released on Tuesday, 16 September.

Attacq is a real estate investment trust listed on the JSE. One of its most notable assets is Mall of Africa and its stake in Waterfall City.

Cell C is one of South Africa’s largest telecoms and has come under severe pressure over the past few years.

This has caused significant pain for its owner, Blue Label Telecoms, whose interest in the mobile operator started in 2017.

In August 2017, Blue Label, which also owns The Prepaid Company, signed its biggest deal ever by acquiring 45% of Cell C for R5.5 billion.

This acquisition was done during a restructuring process that also created three special-purpose vehicles to store the distressed company’s debt.

At the time, Blue Label co-CEO Brett Levy said they were positive about a turnaround in Cell C’s financial and operational performance.

However, Cell C has remained a drag on the company’s results since, and in 2020, Blue Label had to write down its investment in Cell C to zero.

While there are some signs of recovery today, the mobile operator is still technically insolvent and in significant debt.

Cell C’s relationship with Attacq revolves around the buildings where Cell C operates from in Waterfall City, owned by Attacq. 

This 43,890 m² head office is located on the Old Pretoria Main Road with good visibility from the N1 highway. Cell C moved into this campus in 2013 on a 15-year lease.

However, issues arose around 2022, when Cell C underwent a significant recapitalisation that affected its rental agreement with Attacq.

Cell C and Attacq

In 2022, Cell C underwent another restructuring after Blue Label called a meeting for priority creditors to vote in favour of taking an 80% haircut on Cell C’s debt. 

This transaction included restructuring Cell C’s debt owed to certain lenders, totalling around R7 billion. Cell C also amended its lease agreement with Attacq as part of this recapitalisation.

At the time, Attacq asset and property management executive Michael Clampett told MyBroadband that two bullet payments were due to Attacq in the recapitalisation agreements that have been signed.

The first payment was due by December 2024, and the second by December 2026. “That encompasses the amounts that have been due to Attacq since August [2021],” Clampett told the publication in 2022.

However, at the end of the 2024 financial year, Cell C owed Attacq R44.9 million in rental payments in arrears.

Positively, Attacq reported that Cell C covered these outstanding debts in the 2025 financial year.

However, now Cell C owes Attacq another R41.7 million in rental debt. This was due to Cell C vacating the rental space early, before the rental term ended.

Cell C owed Attacq around R139 million in rentals they did not pay, covering the rental space that the company vacated early.

However, in light of Cell C’s financial struggles, Attacq and Cell C agreed that only 30% of the outstanding amount would be settled.

This amounted to a total of R41.7 million, with Attacq writing off R97.3 million of the outstanding rental debt.

This R41.7 million bears 6% interest monthly and is repayable by December 2026.

In its latest results, Attacq reported that Cell C has continued to meet its monthly payments since the new 30% agreement, and it is therefore classified as a performing loan on Cell C’s books.

Written with Daily Investor analyst Drikus Greyling