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Overview

CDB contributes to $131 million loan to Cell C

Commitments (Constant USD, 2023)$68,525,994
Commitment Year•2015Country of Activity•South AfricaDirect Recipient Country of Incorporation•South AfricaSector•CommunicationsFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Dec 18, 2015
Last repayment (originally scheduled)
Dec 15, 2024

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Cofinancing agencies

State-owned companies

  • ZTE Corporation (formerly Zhongxing Telecommunication Equipment Corporation)

Receiving agencies

Private Sector

  • Cell C Limited South Africa

Guarantors

Private Sector

  • Oger Telecom Limited

Loan description

In 2015, CDB and ZTE contribute to USD 131 million loan agreement to Cell C, South Africa

Grant element•18.2367%Interest rate (t₀)•4.307%Interest type•Variable Interest RateLoan tenor•6-month rateMaturity•9 years

Collateral

Property and assets of Cell C Limited.

Narrative

Full Description

Project narrative

On December 28, 2015, China Development Bank (CDB) and ZTE signed $131 million facility (loan) agreement with Cell C Limited (or “Cell C”) — a South African telecommunications company — for unspecified purposes. Record ID#58626 captures CDB's estimated contribution, and Record ID#105365 captures ZTE's estimated contribution. The loan carried an interest rate of six-month Libor plus a 3.5% margin, accrued monthly and settled half-yearly. The loan was set to expire on May 20, 2024. A percentage of the capital outstanding was repayable semi-annually based on a sliding scale. The CDB/ZTE financing facility was 50% guaranteed by Oger Telecom Limited. In a 2017 circular to shareholders, Blue Label Telecoms (a majority shareholder of Cell C) listed the disbursed amount as $46.245 million, with an undrawn facility of $84.755 million remaining. The balance includes accrued interest of $0.217 million. In January 2020, Cell C defaulted on a R2.7 billion loan as well as capital plus interest payments on loan facilities from a number of banks, including China Development Bank. This loan followed an initial Capex facility offered in 2013 (captured via Record ID#58631).

Staff comments

1. AidData has coded the loan as collateralized because an official source indicates that the ICBC loan ‘shared in the First Ranking Security Interests in the Collateral, on an equal and rateable basis with the Holders and the other Senior Lenders, on the terms set out in the Intercreditor Agreement.’ The same source identifies the property and assets of Cell C Limited as the underlying source of collateral. 2. Given that the individual contributions of the banks are unknown, AidData assumes equal contributions ($65,500,000) across the two members of the loan syndicate. AidData Record ID#58626 records China Development Bank's contribution and Record ID#105365 records the contribution from ZTE. 3. AidData has estimated the loan's all-in interest rate -- at the time it was issued -- by adding a 3.5% margin to average 6-month average LIBOR in December 2015 (0.76383%). 4. A capex loan (facility) is used by a company to acquire, upgrade, and maintain physical assets such as property, buildings, an industrial plant, technology, or equipment.