Cell C's proposed restructuring of the company's capital, which would see JSE-listed Blue Label Telecoms buying into the telco, has received board approval.
"The Boards of Cell C and 3C Telecommunications have accepted the offers received from Blue Label Telecoms and Cell C management and staff and will now proceed with the next steps of the transaction as proposed," Cell C said in a statement today.
On 10 December South Africa's third largest mobile network announced that it has received offers to recapitalise the company which will reduce net debt to R8 billion or less when implemented. The restructuring plan also includes a R4 billion capital injection from Blue Label, in return for a 35% stake in the mobile operator.
Cell C management and staff submitted a conditional binding offer of R2.5 billion to subscribe for a number of shares to hold about 30% of the total issued shares in Cell C at the close of the recapitalisation.
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 recapitalisation.
Cell C chairman, Mohammed Hariri, welcomed Blue Label as a strategic partner saying he knows the company will add value to Cell C going forward.
"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," says Hariri.
"Cell C has really hit a winning formula with this deal. The company is creating a formidable force in ownership with employees now on track to own around 30% of equity in Cell C. Coupled with the fact that the remaining debt (post recapitalisation) will be refinanced in South African Rand, the business is building a stronger platform from which to grow, creating true empowerment for all its employees. It also has a strong management team in place to drive the vision forward," adds Hariri.
"The recapitalisation is subject to conditions precedent, including the execution of definitive transaction agreements typical for a transaction of this nature, the securing of funding by all parties and the obtaining of all requisite regulatory approvals," according to Cell C.
The expected effective date of the recapitalisation is 1 June 2016.
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