Blue Label joint CEO Brett Levy
JSE-listed Blue Label Telecoms has wrapped up the R5.5-billion recapitalisation of mobile operator Cell C, taking a 45% ownership, through subsidiary The Prepaid Company, of issued share capital of Cell C more than a year after first initiating the deal.
In an update to shareholders on Monday, Blue Label said the recapitalisation had been fully implemented, with Cell C’s net borrowings reduced to below R6-billion, leaving the company with a “cleaner balance sheet” and in a stronger position to compete across its many consumer fronts.
“This transaction is the most significant in Blue Label’s history and marks a milestone for the group’s strategy. As a supplier and distributor to Cell C, we have already identified multiple synergies in the procurement chain, distribution network and provisioning of products and services,” said Blue Label joint CEO Brett Levy in a statement emailed to Engineering News Online.
“A recapitalised Cell C offers our shareholders compelling growth prospects, including the possibility of a separate stock exchange listing in future.”
The recapitalisation comprised a R5.5-billion subscription for shares from Blue Label and a further subscription from Net1 for R2-billion.
Blue Label holds 45% in Cell C, 3C Telecommunications has 30% – held as 29.4% by the Employee Believe Trust, 45.6% by Oger Telecoms and 25% by broad-based black empowerment grouping CellSAf – while Net1 holds 15% and 10% is held by management and staff.
“The ownership of the company by South African shareholders has increased from 25% to over 86% and the participation of historically disadvantaged persons in Cell C increases from around 25% to more than 30% at ownership level,” added Cell C CEO Jose Dos Santos.
Blue Label’s commercial contracts with all other mobile networks remain unchanged.
Meanwhile, The Prepaid Company has completed the first stage of its R1.9-billion acquisition of mobile device distributor 3G Mobile.
In a separate stock exchange announcement, the local telecommunications firm noted the implementation of the 47.37% of the issued share capital of 3G Mobile for R900-million.
The shares in 3G Mobile will be acquired in two stages, the second of which comprises the acquisition of the remaining 52.63% for R1-billion.
Blue Label will use the acquisition as an expansion platform into the financing and supply of mobile devices, handsets and allied products, which supplements its strategic aim to provide value-added services to both Cell C and its own customer base.