Cell C sale given shareholder nod - TechCentral

Cell C sale given shareholder nod

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South Africa’s third largest mobile network, Cell C, said its board has accepted an offer from Blue Label Telecoms to acquire 35% of the company for R4bn.

The boards of Cell C and its holding company 3C Telecommunications have also accepted an offer from Cell C management and staff to acquire 30% of the mobile network’s shares for R2,5bn.

The board approval comes after Cell C announced earlier this month that it received offers to recapitalise the company — a move that is expected to reduce net debt to R8bn or less when implemented.

Meanwhile, current Cell C shareholder 3C Telecommunications also plans to hold about 35% of the total issued shares at the close of the recapitalisation, a Cell C statement read on Wednesday.

“This transaction will not only benefit Cell C and empower its staff, but more importantly, it will solidify Cell C’s assurance to its customers to provide the most innovative products and services, backed by continued growth and investment in its network,” said chairman of Cell C Mohammed Hariri in a statement.

The planned recapitalisation of Cell C is still subject to all parties securing funding and obtaining regulatory approvals. But if successful, the expected effective date of the recapitalisation is 1 June 2016, Cell C said.

The recapitalisation is further expected to result in the current major stakeholder in Cell C, Dubai-based Oger Telecom, diluting its stake from 75% to approximately 27%, TechCentral reported recently.

Johannesburg-listed Blue Label Telecoms distributes prepaid airtime, starter packs, data and electricity tokens. It also specialises in transactional offerings such as ticketing and financial services. Cell C is South Africa’s third largest network with 22m subscribers.

Blue Label’s interest in acquiring a stake in Cell C was made public after fixed-line telecoms company Telkom last month announced that it had abandoned talks to buy Oger Telecom’s stake in Cell C.  — Fin24

3 Comments

  1. This deal values CELL-C at R11bil but they turned down R14bil offer from Telkom for a 75% steak? The reasoning seems a bit odd.

  2. I think Telkom’s deal was to acquire OGER telecom’s (Saudi owned) entire stake in Cell C. This deal is different. They will retain some ownership, but recapitalize to lower debt.

    And who knows… Maybe they regret not going for Telkom’s deal.

  3. I understand that Joe Black, what I am saying is if a 35% stake is valued at R4bil that means 100% stake is valued at R11bil ! They turned down Telkom’s R14 bil offer for 75% stake, the Telkom offer valued CELL C equity at R18.6 bil. They short changed themselves, if anything they should’ve asked at least R6.5bil for a 35% stake to be on par with the TELKOM proposal. This is obvious from back envelope calculation. Perhaps they should appoint a new corporate finance adviser.

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