CellSAf challenges Cell C’s restructuring plan

24 Mar 2016

Black Economic Empowerment [BEE] entity CellSAf consortium, which owns a 25% indirect stake in South African wireless operator Cell C, has challenged the cellco’s restructuring plan in the High Court. Business Day reported that CellSAf filed an application seeking the liquidation of Cell C’s parent company, 3C Telecommunications, as it was reportedly not consulted on the plan to recapitalise the business. Cell C is wholly owned by holding company 3C Telecommunications, which is itself owned by Oger Telecom South Africa (60%), CellSAf (25%), and Lanun Securities (15%).

As previously reported by TeleGeography’s CommsUpdate, in December 2015 Blue Label and Cell C’s majority owner Oger Telecom signed an agreement for the sale of a 35% stake in the South African operator, with the transaction expected to take effect from 1 June 2016. Under the agreement, Blue Label will provide ZAR4 billion (USD256 million) in new capital, thus significantly reducing Cell C’s current debt. As part of the deal, Cell C employees will acquire a 30% stake in the operator for ZAR2.5 billion (the funding is to be raised through a financial institution), while CellSAf’s stake will be reduced to 9%. Following the conclusion of the deal, 3C Telecommunications (CellSAf and Oger Telecom) will hold 35% of the cellco’s equity, Blue Label will own 35%, while Cell C’s staff and management will be in charge of the remaining 30%.

South Africa, Cell C, Oger Telecom