{"id":160665,"date":"2017-02-27T13:48:01","date_gmt":"2017-02-27T11:48:01","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=160665"},"modified":"2017-02-27T15:10:02","modified_gmt":"2017-02-27T13:10:02","slug":"blue-labels-cell-c-acquisition-deal-inches-closer-after-telkom-scare","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/mobile\/160665\/blue-labels-cell-c-acquisition-deal-inches-closer-after-telkom-scare\/","title":{"rendered":"Blue Label&#8217;s Cell C acquisition deal inches closer after Telkom scare"},"content":{"rendered":"<p>JSE-listed Blue Label Telecoms says it has entered into a &#8216;binding umbrella restructure agreement&#8217; 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.<\/p>\n<p>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.<\/p>\n<p>In <a href=\"https:\/\/businesstech.co.za\/news\/telecommunications\/139073\/blue-label-dumps-r5-5-billion-into-cell-c\/\" target=\"_blank\">October last year<\/a>, 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.<\/p>\n<p>In a statement to shareholders on Monday (27 February), Blue Label said the binding agreement would involve the following:<\/p>\n<ul>\n<li>The maximum Net Borrowings of Cell C will be reduced to approximately R6.0 billion<\/li>\n<li>The third party investor is to subscribe for 15% of the share capital of Cell C for R2.0 billion<\/li>\n<li>Blue Label\u2019s subscription for 45% of the share capital of Cell C remains unchanged.<\/li>\n<\/ul>\n<p>&#8220;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,&#8221; the telco said.<\/p>\n<p>Earlier in February, <a href=\"https:\/\/businesstech.co.za\/news\/business\/155449\/cell-c-defaults-on-payments-gets-downgraded-to-lowest-junk-rating\/\" target=\"_blank\">S&amp;P Global downgraded<\/a> Cell C&#8217;s corporate credit rating after missing an interest payment on its senior secured bonds.<\/p>\n<p>S&amp;P however, did note that Cell C was in the process of restructuring its debt in an acquisition deal involving Blue Label and other shareholders.<\/p>\n<p>&#8220;As such, the current downgrade will be reviewed if and when a deal materialises,&#8221; the ratings firm said.<\/p>\n<p>Following the statement from\u00a0Blue Label, by 13h45 shares in the company jumped 4.6% to R18.61.<\/p>\n<p>Cell C also confirmed in a separate note that it had signed a Restructuring Agreement with its key lenders, majority bondholders and new equity investors, which will see the company reduce its debt to approximately R6 billion.<\/p>\n<p>&#8220;The agreement sets out the framework and agrees the key principles by which the debt will be reduced through a combination of fresh equity injections and an exchange of Cell C debt for equity,&#8221; the operator said.<\/p>\n<p>Cell C highlighted the following lenders including Nedbank, Industrial and Commercial Bank of China (ICBC), China Development Bank and the majority of Euro Bondholders.<\/p>\n<p>The completion of the transaction is subject to the execution of detailed formal agreements and the obtaining of all requisite regulatory approvals.<\/p>\n<hr \/>\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/mobile\/159885\/cell-c-walks-away-from-telkom-talks-again\/\" target=\"_blank\">Cell C walks away from Telkom talks, again<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Blue Label  says it has entered into a &#8216;binding umbrella restructure agreement&#8217; with Cell C, debt providers of the mobile operator, a third party investor and other relevant parties in order to ensure that its acquisition deal goes ahead.<\/p>\n","protected":false},"author":10,"featured_media":106809,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[6064,42,26],"class_list":["post-160665","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mobile","tag-blue-label","tag-cell-c","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/160665","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=160665"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/160665\/revisions"}],"predecessor-version":[{"id":160757,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/160665\/revisions\/160757"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/106809"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=160665"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=160665"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=160665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}