South Africa's Cell C picks up more Chinese cash for debt recycling
Cell C takes second slice of Chinese capital to replace European debt
Published: 7 September, 2010
READ MORE: Africa & Middle East | South Africa | Cell C | ZTE
One of South Africa's second tier cellular operators Cell C, has taken a second round of investment from Chinese sources, this time with China Development Bank, a €240 million ($306 million) debt facility. The money is expected to help refinance much of its Euro denominated debt the company said.
It was only in January that Cell C signed up for almost $400 million of Chinese equipment financing with network equipment maker ZTE, in order to help fund some $680 million of infrastructure investment that the company has targeted for 2010/11.
China will become an increasingly important source of foreign direct investment, as China enters a new phase of economic development. In the past China has been an important target for inbound investment, but investors and economists are now saying that it is healthy for the world economy, a require part of rebalancing debt, for China to begin lending. China clearly sees Africa and Latin America as zones it can export to freely and exert its overseas influence in the way that America has historically exerted influence in Latin America and the Middle East.
China is mostly investing in infrastructure in Africa and has already invested in railways and hydroelectric power there, as well as mining and oil in Latin America. For instance China Railway Group is in talks with South Africa's government for a $30 billion high-speed rail link between Johannesburg and Durban. In total China's outbound investment should match foreign direct investment by 2015 says the China Industrial Overseas Development and Planning Association.
Cell C said that it can draw down on the under the China Development Bank facility after it satisfies a number of unspecified conditions which will be completed over the next few weeks. The facility was put in place during a recent visit of South Africa's President, Jacob Zuma to China.
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