A few more details have emerged about Cell C’s planned recapitalisation, with the Competition Commission on Thursday saying it has given its conditional approval for an entity called Gatsby Security SPV to acquire “certain aspects” of the mobile operator.
Gatsby SPV, the commission said in a statement, is a “ring-fenced, newly incorporated special purpose vehicle which was incorporated for the sole purpose of entering into the proposed transaction”.
“Gatsby SPV will be controlled by a trust that is yet to be formed. The sole purpose of the trust will be to hold the entire issued share capital of Gatsby SPV and therefore does not provide any services or products.”
The commission said the proposed transaction is “unlikely to result in a substantial prevention or lessening of competition in any relevant markets”.
“The commission further found that the proposed transaction does not raise any other public interest concerns.”
However, it said the merging parties are “currently not in a position to confirm who will be appointed as trustees”.
“Therefore, the commission believes that the proposed transaction may raise competition concerns. These include, among others, anticompetitive information exchange should the trustees include individuals from firms that compete with Cell C or present undisclosed competitive overlaps.”
These concerns were not considered in the assessment of the proposed transaction because the trustees have not yet been appointed, the commission said.
“To remedy this potential risk, the commission recommends that the proposed transaction be approved subject to conditions that Gatsby SPV and/or the trust will not be owned or controlled by companies that compete or may compete with Cell C or firms that have a customer-supplier relationship with Cell C (other than a lending relationship).”
In an e-mailed statement, Cell C said it is “pleased” by the commission’s conditional approval of the proposed recapitalisation transaction. “This is an important step towards concluding a complex restructuring for the mobile operator,” it said.
“A recapitalisation is an important pillar of Cell C’s turnaround strategy. We are being diligent and thorough to ensure it is a transaction that meets all conditions and we continue to engage with all stakeholders. In our minds, it is not done and there is still work to do, but we are pleased with the progress to date,” said Cell C CEO Douglas Craigie Stevenson.
According to records at the Companies and Intellectual Property Commission, Gatsby Security SPV is a private company registered on 16 March 2020 that shares the same physical address as Cell C’s largest shareholder, Blue Label Telecoms, namely 75 Grayston Drive, Sandton. Its only director is listed as Blue Label co-CEO Brett Levy. — © 2020 NewsCentral Media
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