45% of Cell C goes to Blue Label

RECAPITALISATION: NET DEBT REDUCED TO LESS THAN R6BN

We’ll work toward the listing of Cell C on the stock market in coming years, says Blue Label co-CEO.

Blue Label Telecoms said it has wrapped up its 45% acquisition of Cell C for R5.5 billion, concluding a restructuring deal that has resulted in the mobile operator’s net debt being reduced from R23 billion to less than R6 billion.

The recapitalisation, which is regarded as crucial if Cell C is to continue to be a meaningful competitor to bigger rivals Vodacom and MTN, has resulted in the previous controlling shareholder, Oger Telecom, reducing its stake in the company and writing off billions of rands in investment.

“Blue Label is pleased to advise shareholders that the Cell C recapitalisation has been fully implemented, resulting in Cell C’s net borrowings being reduced to below R6 billion.

Blue Label, through its wholly owned subsidiary, The Prepaid Company, now owns 45% of the issued share capital of Cell C,” it stated.

The ownership of the company by SA shareholders has increased from 25% to over 86%. The participation of historically disadvantaged persons in Cell C increases from around 25% to more than 30% at ownership level,” Cell C stated.

Blue Label co-CEO Mark Levy said recently the company will work toward the listing of Cell C on the stock market in coming years.

Another JSE-listed company, Net1 UEPS Technologies, has invested R2 billion as part of the recapitalisation. Former bond and debt holders supported the restructure of the debt in Cell C.

At the close of the transaction, Blue Label Telecoms holds 45% in Cell C, 3C Telecommunications 30% (in turn held as 29.4% by the Employee Believe Trust, 45.6% by Oger Telecom and 25% by broadbased black empowerment grouping CellSAf), Net1 15% and 10% on behalf of Cell C management and staff.

“The recapitalisation provides a sustainable growth platform for Cell C that will promote healthy competition in the South African telecoms market to further drive down costs and improve our value offerings,” said Cell C CEO Jose Dos Santos.

Blue Label said its initial acquisition of 47.4% of 3G Mobile for R900 million, also through The Prepaid Company, has been implemented, too. – TechCentral