JSE-listed Blue Label says it has signed the final equity transaction agreements to the recapitalisation of mobile operator, Cell C.
The matter relates to the conclusion of a binding umbrella restructure agreement for the recapitalisation of Cell C, by Blue Label, which was subject to the conclusion of the relevant transaction agreements.
The deal is anticipated to be implemented during the first week of August 2017 as it is subject to Blue Label shareholder approval in a general meeting.
Blue Label said it anticipates issuing an updated circular, and convening a general meeting before the end of July 2017 in order to seek the approval of shareholders.
Details of the amended agreements include the following:
- Net borrowings of Cell C to be reduced to a maximum of R6 billion (previously R8.0 billion).
- An increase in the Blue Label vendor consideration placement from R2.0 billion to R2.75 billion, at a price of R15.00 per Blue Label share.
- The Prepaid Company Proprietary’s subscription remains unchanged at 45% of Cell C for a subscription price of R5.5 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 $60 million to a special purpose vehicle set up to hold shares in Cell C.
The telco said it has obtained irrevocable undertakings from approximately 53% of shareholders to vote in favour of the Cell C deal, including the vendor consideration placement of R2.75 billion.