Cell C will reduce its net borrowings to a maximum of R6bn — from a proposed R8bn previously — Blue Label Telecoms, which is in the throes of buying a 45% stake in the mobile operator for R5,5bn, told shareholders this week.
The reduction in maximum net borrowings will allow Cell C to realise “significant operating and financial flexibility and is expected to strongly enhance Blue Label’s investment prospects in Cell C”, it said.
The deal, which was approved at a general meeting of Blue Label shareholders in Sandton on Wednesday, is now expected to be concluded by the end of February 2017.
“The latest date for the fulfilment or waiver, as the case may be, of the final condition precedent to the proposed transaction will be 28 February 2017 (previously 31 December 2016).
Cell C said in October that, through its subsidiary The Prepaid Company, it was planning to buy 45% of Cell C for R5,5bn in a deal that also involves Net1 UEPS Technologies.
It had previously said it intended buying 35% of the mobile operator for R4bn as part of its recapitalisation.
The management (10%) and staff (15%) of Cell C will subscribe for 25% of the issued capital and 3C Telecommunications will subscribe for sufficient new equity to hold the remaining 30%.
Following completion of the deal, between 32% and 36% of Cell C’s equity will be in black hands.
Cell C’s current shareholding structure includes a 60% stake by Oger Telecom South Africa, a 15% stake by Lanun Securities and a 25% stake by CellSAf in 3C Telecommunications, which in turn owns 100% of the mobile operator’s equity.
Blue Label, through The Prepaid Company, will settle the R5,5bn acquisition price with R2bn via a vendor consideration placement with Net1 UEPS Technologies at a price of R16,96/share. Net1 will take a 15% equity stake in Blue Label. The remaining R3,5bn will be settled using Blue Label’s available cash and funding facilities. — (c) 2016 NewsCentral Media