Cell C buyout given green light
Cell C says its board and that of 3C Telecommunications have approved an offer from Blue Label Telecoms to invest R4 billion in it.
|||Johannesburg - Cell C says its board and that of 3C Telecommunications have approved an offer from Blue Label Telecoms to invest R4 billion in SA’s third national operator.
3C Telecommunications is the holding company that owns Cell C and it is 60 percent owned by Oger Telecom South Africa, 15 percent by Lanun Securities and 25 percent by CellSAF.
Cell C says in a statement issued on Wednesday that its “management and staff and will now proceed with the next steps of the transaction as proposed”.
The third mobile operator said on December 10 it had received offers to recapitalise the company which will reduce net debt to R8 billion or less when implemented.
Blue Label Telecoms submitted a conditional binding offer of R4 billion to subscribe for a number of shares to hold around 35 percent of the total issued shares in Cell C at the close of the recapitalisation, and Cell C management and staff submitted a conditional binding offer of R2.5 billion to subscribe for a number of shares to hold about 30 percent of the total issued shares in Cell C at the close of the recapitalisation.
Current Cell C shareholder 3C Telecommunications will also subscribe for a number of shares to hold about 35 percent of the total issued shares at the close of the recapitalisation.
“This transaction will not only benefit Cell C and empower its staff, but more importantly, it will solidify Cell C’s assurance to its customers to provide the most innovative products and services, backed by continued growth and investment in its network. We welcome Blue Label Telecoms as a strategic partner and know that it will add value to Cell C going forward,” said Cell C chairman Mohammed Hariri.
“Cell C has really hit a winning formula with this deal. The company is creating a formidable force in ownership with employees now on track to own around 30 percent of equity in Cell C.
“Coupled with the fact that the remaining debt (post recapitalisation) will be refinanced in South African Rand, the business is building a stronger platform from which to grow, creating true empowerment for all its employees. It also has a strong management team in place to drive the vision forward,” said Hariri.
The recapitalisation is subject to the usual conditions, which include the execution of definitive transaction agreements typical for a transaction of this nature, the securing of funding by all parties and the obtaining of all requisite regulatory approvals.
The expected effective date of the recapitalisation is June 1, 2016.
IOL