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    TechCentralTechCentral
    Home » News » New dawn for Cell C

    New dawn for Cell C

    By Staff Reporter7 August 2017
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    Mark Levy

    Blue Label Telecoms said on Monday that it has wrapped up its acquisition of 45% of Cell C for R5.5bn, concluding a restructuring deal that has resulted in the mobile operator’s net debt being reduced from R23bn to less than R6bn.

    The recapitalisation — regarded as crucial if Cell C is to continue to be a meaningful competitor to bigger rivals Vodacom and MTN — has resulted in the previous controlling shareholder, Oger Telecom, reducing its stake in the company and writing off billions of rand in investment.

    “Blue Label is pleased to advise shareholders that the Cell C recapitalisation has been fully implemented, resulting in Cell C’s net borrowings being reduced to below R6bn. Blue Label, through its wholly-owned subsidiary, The Prepaid Company, now owns 45% of the issued share capital of Cell C,” it said in a statement issued on the JSE’s stock exchange news service before markets opened on Monday.

    The ownership of the company by South African shareholders has increased from 25% to over 86%

    Blue Label co-CEO Mark Levy said recently that the company will work toward the listing of Cell C on the stock market in the coming years.

    Another JSE-listed company, Net1 UEPS Technologies, has invested R2bn as part of the recapitalisation. Former bond and debt holders supported the restructure of the debt in Cell C.

    At the close of the transaction, Blue Label Telecoms holds 45% in Cell C, 3C Telecommunications 30% (in turn held as 29.4% by the Employee Believe Trust, 45.6% by Oger Telecom and 25% by broad-based black empowerment grouping CellSAf), Net1 15% and 10% on behalf of Cell C management and staff.

    “The ownership of the company by South African shareholders has increased from 25% to over 86% and the participation of historically disadvantaged persons in Cell C increases from around 25% to more than 30% at ownership level,” Cell C said in a statement on Monday.

    ‘Growth platform’

    “The recapitalisation provides a sustainable growth platform for Cell C that will promote healthy competition in the South African telecoms market to further drive down costs and improve our value offerings,” said Cell C CEO Jose Dos Santos.

    Jose Dos Santos

    He said Cell C now has a sustainable capital structure to deliver on its strategic objectives to improve financial returns from increased network utilisation, upgrade network infrastructure and expand LTE coverage.

    In a separate statement, Blue Label said its initial acquisition of 47.4% of 3G Mobile for R900m, also through The Prepaid Company, has been implemented, too.

    Blue Label closed at R16.70 on Friday. The share has fallen by 6.5% in the past 12 months, but has risen by 10.7% in the past month.  — (c) 2017 NewsCentral Media



    3G Mobile Blue Label Telecoms Cell C Mark Levy MTN Net1 Net1 UEPS Technologies Oger Telecom top Vodacom
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