Net1 exits Blue Label vendor placement, continues to acquire direct Cell C stake
Dual-listed Net1 UEPS Technologies on Thursday said it will continue to progress its plans to acquire a 15% direct interest in mobile operator Cell C for R2-billion after cancelling its agreement to subscribe for shares in Blue Label.
Net1 had initially committed to subscribe for R2-billion of Blue Label shares as a vendor consideration placement in the original Cell C recapitalisation plan under which Blue Label is acquiring a 45% stake in the mobile operator.
Under the mutual agreement to part ways and with Net1 no longer participating in the vendor consideration placement in Blue Label, Net1 had been released from its R2-billion guarantee issued by FirstRand Bank.
“In light of [this], Blue Label has signed binding subscription agreements with alternative third-party investors in terms of which they will, subject to the requisite shareholder approval and the Cell C recapitalisation becoming unconditional, subscribe for R2-billion of Blue Label shares in terms of a vendor placement at a price of R15 a share,” Blue Label said.
Net1 also announced progress with the finalisation of the terms of its proposed acquisition of a noncontrolling interest in Cell C’s mobile subscriber starter packs distributor DNI-4PL Contracts. The option to acquire a controlling stake in DNI in the future remained in place.
“The proposed investments in Cell C and DNI are subject to certain conditions, including the satisfactory completion of due diligence, the required internal and external approvals and the execution of definitive transaction agreements,” Net1 noted.
The company intended settling the purchase consideration for the two investments using a combination of surplus cash and debt.
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