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Blue Label to buy 35% of Cell C

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 10 Dec 2015
"We're now building a stronger and more sustainable growth platform while refinancing our debt in South African Rand on favourable terms," says Cell C CEO Jose Dos Santos.
"We're now building a stronger and more sustainable growth platform while refinancing our debt in South African Rand on favourable terms," says Cell C CEO Jose Dos Santos.

Cell C today announced a proposed restructuring of the company's capital that would see JSE-listed Blue Label Telecoms pay R4 billion for approximately 35% of Cell C's total issued share capital.

The deal would 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, the company says.

"We're now building a stronger and more sustainable growth platform while refinancing our debt in South African Rand on favourable terms," says Cell C CEO Jose Dos Santos.

Cell C management on behalf of its employees has also submitted a binding offer to co-invest in the company with Cell C's current shareholder, 3C Telecommunications Proprietary Limited (3C Telecommunications) and Blue Label. Cell C employees will then hold around 30% of the total issued share capital in Cell C at a cost of R2.5 billion at the conclusion of the restructuring programme.

If successful, the restructuring will result in 3C Telecommunications holding 35%, management and staff 30% and Blue Label 35% of the ordinary shares in Cell C.

"The restructuring will allow us to support our continued growth, network expansion and investment in data networks," says Dos Santos. "More importantly, should this transaction be approved it will become one of the largest employee ownership deals in the country."

Blue Label Telecoms today informed the market through a SENS announcement that it has submitted a conditional binding offer to the board of directors of Cell C.

The restructuring is subject to regulatory approvals and the expected effective date is 1 June 2016.

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