Blue Label hikes Cell C stake to 45%, recapitalisation to be concluded by mid-Nov
The recapitalisation of telecommunications group Cell C is expected to be concluded by November 18, with JSE-listed Blue Label hiking its stake to 45% in a deal that will enable South Africa’s third-largest mobile operator to reduce its debt by R8-billion.
The signing of the conditional agreements for a proposed recapitalisation of Cell C mean that Blue Label will now contribute R5.5-billion in a subscription – up from the previously proposed R4-billion for 35% – through its wholly owned subsidiary The Prepaid Company.
Some R3.5-billion of the consideration will be funded from available cash and funding facilities, with the balance raised through a vendor consideration placement with NET1 UEPS Technologies, through its South African subsidiary Net1 Applied Technologies South Africa, at a price of R16.96 a share.
Cell C management and staff will subscribe for 25% of Cell C’s issued capital and 3C Telecommunications for the remaining 30%, allowing existing shareholders Oger Telecom and 3C to remain invested in Cell C.
“The implementation of the Cell C recapitalisation will result in its existing net borrowings, comprising any contractual obligations pertaining to monies borrowed, including shareholder loans, less cash and cash equivalents, being reduced to a maximum of R8-billion by November,” Blue Label and Cell C said in a joint announcement on Wednesday.
The proposed recapitalisation is subject to funding of all parties and necessary regulatory approvals.
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