Cell C to embark on restructure; employees, Blue Label earn an interest
South Africa’s third-largest telecommunications operator Cell C will restructure its capital to reduce its debt to R8-billion or less.
JSE-listed Blue Label Telecoms would invest R4-billion to acquire a 35% stake in Cell C as part of the restructure.
Cell C management, on behalf of its employees, had also submitted a binding R2.5-billion offer to co-invest in the company with Cell C’s current shareholder, 3C Telecommunications and Blue Label.
Cell C management and employees would hold around 30% of the company at the conclusion of the restructuring.
If concluded, the restructuring would result in 3C Telecommunications holding 35%, management and staff 30% and Blue Label 35% of the company’s ordinary shares.
“The restructuring follows the tremendous growth and development we’ve successfully completed in the last three years. We’re now building a stronger and more sustainable growth platform while refinancing our debt in South African rand on favourable terms,” Cell C CEO Jose Dos Santos said in a statement.
He added that the restructuring would allow the company to support its continued growth, network expansion and investment in data networks.
“More importantly, should this transaction be approved it will become one of the largest employee ownership deals in the country. Through this transaction, we will see more employees of our company share in the success as they continue to deliver,” Dos Santos highlighted.
The expected effective date of the restructuring was June 1, 2016.
Cell C’s parent company Oger Telecom, which held a 60% interest in 3C Telecommunications, had, in November, held discussions with Telkom regarding the proposed buyout of Cell C. The parties had, however, decided not to proceed with the proposed buyout.
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