Cell C’s BEE partner wants to scrap R5.5 billion Blue Label deal: report
Cell C’s black equity partner CellSAF has reportedly threatened to prevent the network operator’s deal with Blue Label Telecoms from going through.
Blue Label plans to buy a 45% stake in Cell C for R5.5 billion, which is part of a move to reduce the network’s net borrowings to R6 billion.
According to a report by BusinessDay, CellSAF accused shareholder Oger Telecom of “not working in the best interest of Cell C”.
CellSAF holds a 25% stake in the firm that owns Cell C, 3C Telecommunications.
The report comes after CellSAF launched a court challenge against the Blue Label deal in November.
CellSAF said in court papers it was not informed of the deal or given the opportunity to comment on it or consider the transaction before it went ahead, reported Reuters at the time.
“Should the black empowerment partner succeed in derailing the R5.5bn investment into Cell C, it could complicate the operational viability of the debt-laden operator,” said BusinessDay.
Should the planned deal go through, CellSAF’s indirect shareholding in Cell C would be reduced to 7.5%.
CellSAF chairman Mathews Phosa said diluting Cell C’s black equity would be “illegal and improper”, according to the report.
The report stated that CellSAF has approached ICASA to stop the deal going ahead.
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