Net1 offers Cell C R2bn for 15% stake

NET1 Universal Electronic Payment Systems (UEPS) Technologies reiterated it will continue to pursue its acquisition of a 15% stake of Cell C for a cash consideration of R2 billion, but now through surplus cash and debt.

Net1 was a party to the umbrella restructure agreement with Cell C in which it was going to buy a 15% stake in Blue Label Telecoms worth R2bn, while Blue Label was to buy a 45% stake in Cell C for R5.5bn.

The sale of the stakes in Cell C is part of efforts to slash the mobile operator’s debts from R20bn to R6bn.

But Blue Label and Net1’s subsidiary, Net1 Applied Technologies South Africa, have since mutually agreed that Net1 SA would not buy shares in Blue Label and that agreement has therefore been terminated.

Net1 said it has also been released from its R2bn guarantee that was issued by Rand Merchant Bank in favour of Blue Label.

Another strategic acquisition in Net1’s sights is a 49.6% stake of DNI-4PL Contracts, a distributor of Cell C’s mobile user starter-packs and prepaid airtime through a network of field operatives and agents.

Net1 said it had concluded a memorandum of understanding to buy DNI-4PL Contracts’ stake. This would be in addition to the 15% stake at Cell C. “The company continues to make substantial progress toward finalising terms to acquire a non-controlling interest in DNI-4PL Contracts, with an option to acquire a controlling stake in DNI in the future,” Net1 said.

Meanwhile, Net1 appointed veteran IT executive Alfred Mockett as an independent non-employee director who would also serve on the nominating and corporate governance, audit and remuneration committees from yesterday.

Net1’s board now comprises one executive and four independent directors and the company expects to announce additional appointments in due course.