[dropcap]B[/dropcap]lue Label Telecoms is pushing ahead with a plan to recapitalise Cell C. Under the plan, it will become a 45% shareholder, through subsidiary The Prepaid Company, in South Africa’s third largest mobile operator.
The JSE-listed Blue Label said on Monday that it has signed the “final equity transaction agreements” for the planned recapitalisation. It will now call a general meeting of shareholders by the end of July to seek their approval of the amended terms. If approved, which is expected given it already has the backing of 53% of shareholders, the recapitalisation should be implemented in early August.
Earlier this month, Net1 UEPS Technologies, which is also listed on the JSE, said it had decided not to subscribe for shares in Blue Label as part of the Cell C recapitalisation, but would still pursue a planned direct acquisition of 15% of the mobile operator for R2bn.
At the time, Blue Label said that as a result of Net1’s decision, it had signed binding subscription agreements with alternative third-party investors worth R2bn.
It said on Monday that this placement has been increased to R2.75bn, at a price of R15 per Blue Label share.
Under the plan that will be presented to shareholders, The Prepaid Company’s subscription remains unchanged at 45% of Cell C for a price of R5.5bn.
In addition, The Prepaid Company has agreed to provide “liquidity support”, to the extent required, in the form of interest bearing subordinated loans of up to US$60m, to a special purpose vehicle set up to hold shares in Cell C.
Under the recapitalisation plan, Cell C’s net borrowings will be reduced to a maximum of R6bn, from a proposed R8bn before. — (c) 2017 NewsCentral Media
