SA’s Net1 to buy 15% stake in Cell C for R2 billion

by Staff Writer

Net1, a Nasdaq and JSE-listed tech firm that is embroiled in a tussle with the South African government in its social grants contracts, is to buy 15% stake in Cell C for R2 billion.

The deal will facilitate the recapitalisation of Cell C by Blue Label Telecoms, which is subscribing for 45% of the third-biggest local mobile phone operator.

Net1 is also planning to acquire 49.6% of DNI-4PL Contracts (Pty) Ltd (“DNI”), with an option to acquire a controlling stake in DNI in the future.

DNI is the leading distributor of mobile subscriber starter packs for Cell C and also distributes pre-paid airtime through an extensive network of field operatives and agents.

The proposed investments in Cell C and DNI are subject to the completion of due diligence, the required internal and external approvals and the execution of definitive transaction agreements.

Net1 intends to settle the purchase consideration for these two investments using a combination of surplus cash, debt and new equity placement.

“The combination of the diverse technological, commercial and logistical capabilities of Net1, Blue Label, Cell C and DNI provides a substantial and compelling business case for us,” said Serge Belamant, Chairman and CEO of Net1.

“We are very excited about concluding these transformational transactions and will provide further details regarding the rationale for these transactions, the final consideration paid and the funding structure when the transactions close.”


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