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Cell C BEE partner rejects recapitalisation deal

Staff Writer
By Staff Writer, ITWeb
Johannesburg, 27 Feb 2017
CellSAf claims it has not been consulted about the involvement of a mystery new investor in the Cell C-Blue Label recapitalisation deal.
CellSAf claims it has not been consulted about the involvement of a mystery new investor in the Cell C-Blue Label recapitalisation deal.

CellSAf, Cell C's 25% BEE investor, says it remains opposed to the recapitalisation of Cell C, and will continue to fight against it, despite Blue Label Telecoms confirming the deal will in fact go ahead.

Cell C announced its recapitalisation plans on 10 December 2015, with the expected effective date of the restructuring being 1 June 2016. However, Cell C's planned recapitalisation and lucrative equity deal with Blue Label has suffered a few stumbling blocks.

This afternoon, Blue Label confirmed a "binding umbrella restructure agreement" has been entered into by itself, Cell C, debt providers of Cell C, a third-party investor and other relevant parties.

In terms of the deal, Cell C's maximum net borrowings will be reduced to approximately R6 billion, compared to over R20 billion currently. The third-party investor will subscribe for 15% of the share capital of Cell C for R2 billion and Blue Label's subscription for 45% of the share capital of Cell C remains unchanged.

In statement, CellSAf says it has not been consulted about the involvement of a mystery new investor, nor is it aware of what has become of the bogus employee share scheme, that was earmarked to acquire 15% of Cell C for R2 billion.

CellSAf further claims it has not been advised of the nature of agreements or the conditions that must be fulfilled by 30 June 2017, as announced by Blue Label today.

In a statement, the BEE investor says: "CellSAf notes that, once again, the board of Cell C, Oger Telecoms, Blue Label Telecoms and a handful of executives, who are free-loaders for 10% of the transaction, have taken decisions around an asset, owned 25% by CellSAf, without any consultation or approval from CellSAf.

"Once again, CellSAf is being advised of significant changes to a transaction, it has opposed from inception, through the media and through SENS updates and cautionary announcements by Blue Label Telecoms.

"CellSAf is not represented on the board of Cell C despite having nominated its new representatives over a year ago. CellSAf's solitary director on the 3C board, where once again the appointment of five other nominees is being obstructed by Oger Telecoms, was not consulted on the new agreements. The transaction, therefore, remains illegal and irregular, and CellSAf will continue to seek protection from the courts, as well as regulatory bodies including ICASA, the Competition Commission, the Department of Telecommunications, the CIPC and the JSE, among others," according to the statement.

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