Blue Label buys more Cell C debt for R450 million

Blue Label, through its subsidiary The Prepaid Company, has entered into a deal to buy millions of Cell C’s debt from telecoms company Gramercy.

In a SENS announcement this morning, Blue Label announced that Cell C owes Gramercy R414.77 million, plus interest.

Cell C would have had to pay this debt back by the end of March 2026. However, Cell C has yet to make any payments on the debt.

Therefore, on 11 November, The Prepaid Company (TPC) and Gramercy concluded a deal whereby TPC will buy this debt for R450 million.

TPC will pay Gramercy back in four non-interest-bearing instalments of R112.5 million in cash. Blue Label said this would be funded from the company’s cash resources or existing facilities.

If TPC misses any of its scheduled payments to Gramercy, default interest will accrue on the outstanding amount at a rate of 15% per annum.

As security for the payment, TPC will cede the following to Gramercy:

• All of TPC’s rights, title and interest in and to the debt claim
• Any shares in Cell C that TPC will acquire from Gramercy pursuant to a separate share acquisition that the company concluded.

This share acquisition is a separate transaction that the two companies entered into, whereby TPC will buy 6.09% (88,939,299 shares) of the issued share capital of Cell C from Gramercy.

TPC will acquire these shares for R6 million, which values Cell C at R98.5 million.