Telecoms

Blue Label to invest R5.5bn in Cell C

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Cell C's planned recapitalisation is expected to be implemented by 18 November.
Cell C's planned recapitalisation is expected to be implemented by 18 November.

Blue Label Telecoms will now contribute R5.5 billion to gain 45% of Cell C's total issued share capital as part of a proposed recapitalisation of the company, expected to be concluded next month. This is a significant increase on Blue Label's previous plan to invest R4 billion to gain approximately 35% of the mobile operator.

The planned recapitalisation of Cell C was announced in December 2015 and is now expected to be implemented by 18 November 2016, the telecoms operator revealed today. Cell C says conditional agreements for the restructuring have been signed.

The management and staff of Cell C will subscribe for 25% of the issued capital and 3C Telecommunications will subscribe for the sufficient new equity to hold the remaining 30% of the total issued share capital.

"We are delighted to announce this partnership with Blue Label Telecoms and Cell C management and staff. This transaction allows Oger Telecom and 3C to remain invested in Cell C and participate in the value creation arising from this enhanced strategic relationship. We look forward to seeing Cell C achieving new heights," says Mohammed Hariri, chairman of Cell C and Oger Telecom.

The proposed recapitalisation will reduce Cell C's net debt to approximately R8 billion and enable the company to continue to deliver on its growth strategy in a sustainable manner.

"The recapitalisation provides a sustainable growth platform to build on our successes as we continue to drive customer value to realise our exciting growth potential. This is a transformational transaction for Cell C and we are extremely excited about the strengthening of our relationship with Blue Label Telecoms," according to Cell C CEO Jose Dos Santos.

The proposed recapitalisation is subject to funding of all parties and necessary regulatory approvals.

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