Blue Label's shareholders approve Cell C takeover

28 Jul 2017

JSE-listed Blue Label Telecoms has revealed that its shareholders have approved a move to buy a 45% stake in Cell C for ZAR5.5 billion (USD424 million) at a general meeting held earlier this week, following 18 months of negotiations. Under the deal – which is expected to be completed via Blue Label’s subsidiary the Prepaid Company by 1 August – Cell C’s net borrowings will be reduced from ZAR23 billion to ZAR6 billion. The Prepaid Company has agreed to provide ‘liquidity support’ to the extent required, in the form of interest bearing subordinated loans of up to USD60 million, to a special purpose vehicle set up to hold shares in Cell C. The recapitalisation is expected to put Cell C in a stronger position to compete with its bigger rivals, Vodacom and MTN. An unnamed third-party investor (thought to be Net1 UEPS Technologies, as the company was mentioned in a prior press release to shareholders), will subscribe for 15% of Cell C’s share capital for ZAR2 billion.

South Africa, Blue Label Telecoms, Cell C