JSE-listed Blue Label Telecoms has published the final terms of its deal to acquire a sizeable piece of mobile operator Cell C – a R5.5 billion payment for 45% of the company.<\/p>\n
Blue Label said in a SENS announcement on Wednesday, that it will increase its stake in Cell C from the 35% it originally announced in December 2015.<\/p>\n
The deal is part of Cell C’s efforts to pay down debts which forced it into a restructuring with bondholders in 2015, involving a three-year maturity extension to July 2018.<\/p>\n
The implementation of the Cell C recapitalisation with Blue Label, if successfully completed, will result in the operator’s\u00a0existing net borrowings\u00a0being reduced to a maximum of R8 billion, the company said.<\/p>\n
On top of the 45% stake owned by Blue Label, Cell C plans to\u00a0issue new shares to staff, senior management and existing shareholders to help reduce debt.<\/p>\n
Blue Label said it would structure the R5.5 billion payment through R3.5 billion of its own available cash, and another R2 billion from NET1 UEPS Technologies.<\/p>\n
NET1’s contribution will be through a\u00a0vendor consideration placement as a result of the strategic stake it acquired in Blue Label earlier in October. The company said the Cell C\/Blue Label deal will provide an opportunity for all three companies to extend their reach in South Africa.<\/p>\n
“The combination of the Net1 and Blue Label infrastructures is expected to\u00a0envelop all areas of South Africa through our combined physical and mobile branches,” Net1 said of the deal.<\/p>\n
The deal is awaiting shareholder approval and a number of other conditions that need to be met by Cell C. The effective date of the proposed transaction will\u00a0be 18 November 2016.<\/p>\n
Cell C targets home users with 200GB LTE broadband data packages<\/a><\/strong><\/p>\n