[dropcap]N[/dropcap]et1 UEPS Technologies has decided not to subscribe for shares in Blue Label Telecoms as part of a recapitalisation plan for Cell C, but will still pursue a planned direct acquisition of 15% of the mobile operator’s equity for R2bn.
In a statement to shareholders on Thursday, Net1 — whose CEO Serge Belamant stepped down on Wednesday amid uproar over a golden handshake worth more than R100m — the company said it had reached an agreement with Blue Label not to subscribe for the shares.
It has been released from a R2bn guarantee issued by FirstRand Bank in favour of Blue Label, it said.
At the same time, Net1 said it still plans to buy a non-controlling interest (previously disclosed as 49,6%) of DNI-4PL Contracts, with an option to acquire a controlling stake in DNI in the future. DNI is a distributor of mobile subscriber starter packs for Cell C and distributes prepaid airtime through a network of field operatives and agents. It said talks are progressing regarding both deals.
In a separate statement to shareholders, Blue Label said the Cell C recapitalisation discussions — in terms of which it had previously said it was planning to acquire 45% of the mobile operator for R5,5bn — are “progressing”. It confirmed that Net1 will “no longer participate in the vendor consideration placement” in Blue Label.
“In light of the above, Blue Label has signed binding subscription agreements with alternative third-party investors in terms of which they will, subject to the requisite shareholder approval and the Cell C recapitalisation becoming unconditional, subscribe for R2bn of Blue Label shares in terms of a vendor placement at a price of R15/share.”
Blue Label said it has obtained “irrevocable undertakings” from more than 50% of its shareholders to vote in favour of the Cell C recapitalisation and the new vendor placements. It did not say who the new investors are.
Due to the latest development, and “possible consequential amendments” to the Cell C recapitalisation plan, Blue Label will issue a revised circular to shareholders at a future date, it said. — © 2017 NewsCentral Media
