The boards of Cell C and 3C Telecommunications have approved the recapitalisation of the country’s third largest mobile phone operator, Cell C and making Blue Label Telecoms a strategic equity partner. By Staff Writer
The board’s have accepted a R4 billion offer by Blue Label Telecoms to subscribe for 35% of Cell C’s total issued share capital. They have also accepted a R2.5 billion offer from Cell C management and staff to subscribe for 30% of the total issued shares in the company.
Current Cell C shareholder 3C Telecommunications will also subscribe for a number of shares to hold about 35% of the total issued shares at the close of the recapitalization.
The recapitalisation programme will reduce Cell C’s net debt from the high double-digit numbers to a very manageable maximum of R8 billion or less when implemented.
The target is to reduce the debt further over the next 12 months.
“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.
“We welcome Blue Label Telecoms as a strategic partner and know that it will add value to Cell C going forward.”
The recapitalization is subject to the execution of definitive transaction agreements, securing of funding by all parties and the obtaining of all requisite regulatory approvals.
The expected effective date of the recapitalization is 1 June 2016.
Blue Label has, for a number of years, acted as a one of the primary distribution channels for Cell C’s products.