Liquid in deep trouble

Liquid Intelligent Technologies has taken out $410 million (R6.5 billion) in new rand- and US-dollar-denominated credit facilities to help cover its mountain of debt, which is about to come due.

The company, a subsidiary of Cassava Technologies, confirmed the full repayment of its rand-denominated and US dollar revolving credit facility this week.

In its third-quarter results for the nine months ended 30 November 2025, Liquid explained that it is currently funded through $812 million (R12.9 billion) of equity and outstanding debt.

This includes $620 million (R9.8 billion) in Senior Secured Notes, which become due in September 2026, a $60 million revolving credit facility, and a R3.3 billion ($220 million equivalent) rand-based term loan.

The USD facility had $25.2 million outstanding and matured in March 2026. The rand-denominated term loan had $134.9 million outstanding at 30 November 2025.

Liquid has now repaid the R3.3-billion term loan and $60 million revolving credit facility, both of which were due soon.

"In tandem with this repayment, Liquid has agreed $410 million in new ZAR and USD credit facilities from a syndicate of commercial and development finance lenders," it stated.

Cassava Technologies said it would further reinforce Liquid's financial position by injecting $195 million (R3.1 billion)  in fresh capital into the business.

Liquid also intends to issue a new $300 million bond to replace its existing $620 million bond in advance of its maturity in September 2026.

"This move will reduce Liquid's overall leverage and further strengthen the company's balance sheet," the company said.

"These transactions, alongside the recent sale of a minority stake in a data centre subsidiary in South Africa, are part of a significant strengthening of our capital structure," said Cassava CEO Hardy Pemhiwa.

According to Pemhiwa, the group is positioning itself for accelerated growth through these recapitalisation transactions.

The company noted that Africa Data Centre Holdings (ADCH) remains a wholly owned subsidiary of Cassava Technologies, as the minority stake sale was in the ADCH South Africa business.

Liquid's notice that it had repaid its loans coming due in March was effectively an announcement that it had successfully executed the first step in a high-stakes survival plan.

This was recently evidenced by Moody's Investors Service downgrading Liquid from Caa1 to Caa2,  a rating which is deep in sub-investment-grade territory and considered poor quality and very high credit risk.

The agency said its rating took into account Liquid's strong market position as the largest pan-African fibre network covering more than 20 countries across central, Eastern and Southern Africa.

It also factored in Liquid's exposure to supportive industry dynamics, given the growing demand for carrier and enterprise broadband services across Africa.

Additionally, Moody's said its rating considers Liquid's long-standing contractual relationships with a blue-chip customer base characterised by moderate customer concentration and low customer churn.

Moody's flagged Liquid's outstanding debts as a concern, stating that although plans were underway to resolve the situation, significant execution risks remained.

It noted that part of the plan was for the Cassava group to raise $100 million from asset sales outside the Liquid Telecom bond perimeter and to inject it into the company.

"We are aware of Moody's revised rating on the company's bond due September 2026. We cannot comment on the merits of their decision," a Liquid spokesperson previously told MyBroadband.

"Our debt refinancing plans are progressing well with the significant milestones that we have recently announced to the market. We will communicate to the market as we complete the rest of our refinancing plan."

Even if Liquid successfully executes its entire recapitalisation plan, it remains to be seen whether it has allowed Liquid to avoid an iceberg, or if it was just shuffling deck chairs on an already sinking Titanic.