Net1 offers R2 billion for 15% stake in Cell C

Net1 on Wednesday announced that it has agreed with Blue Label Telecoms to join as a party of the restructure agreement with Cell C.

Separately however, Net1 has also offered to acquire a direct stake of 15% of the issued share capital of Cell C, for a consideration of R2 billion.

The company said it has also concluded a memorandum of understanding to acquire 49.6% of DNI-4PL Contracts with an option to acquire a controlling stake in DNI in the future.

DNI is the leading distributor of mobile subscriber starter packs for Cell C and also distributes pre-paid airtime through an extensive network of field operatives and agents.

This follows news that Blue Label Telecoms has entered into a binding agreement with Cell C for a subscription for 45% of the share capital of the network operator for R5.5 billion.

“The company is also a party to the umbrella restructure agreement with Cell C and has offered to acquire a direct stake of 15% of the issued share capital of Cell C for a consideration of R2 billion,” said Net1 in a SENS statement.

JSE-listed Blue Label Telecoms announced on Monday that it had entered into a ‘binding umbrella restructure agreement’ with Cell C, debt providers of the mobile operator, a third party investor, and other relevant parties to ensure that its acquisition deal goes ahead.

Bloomberg reported last week that Telkom was again considering a bid of $1 billion (around R13 billion) for Cell C. However, Cell C said it is committed to its deal with Blue Label, which was initially announced as far back as December 2015.

In October last year, Blue Label said it would up its stake in Cell C with a R5.5 billion payment for 45% of the company, up from R4 billion for a 35% stake it originally offered.

In a statement to shareholders on Monday (27 February), Blue Label said the binding agreement would involve the following:

  • The maximum Net Borrowings of Cell C will be reduced to approximately R6.0 billion
  • The third party investor is to subscribe for 15% of the share capital of Cell C for R2.0 billion
  • Blue Label’s subscription for 45% of the share capital of Cell C remains unchanged.

“The binding restructure agreement is subject to the conclusion of the relevant transaction agreements, which agreements are expected to be unconditional by no later than 30 June 2017,” the telco said.

The agreement is scheduled to be finalised by no later than 30 June 2017.


Read: Blue Label’s Cell C acquisition deal inches closer after Telkom scare

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Net1 offers R2 billion for 15% stake in Cell C