08 Aug Blue Label now owns 45% stake in Cell C
South Africa-based mobile network operator Cell C has concluded the recapitalisation of the company, made possible by a subscription for shares from Blue Label Telecoms of R5.5 billion and a further subscription from Net1 for R2.0 billion. The result of the transaction is that Blue Label Telecoms owns a 45% stake in Cell C.
Moreover, 3C Telecommunications owns 30% (in turn held as 29.4% by the Employee Believe Trust, 45.6% by Oger Telecoms and 25% by broad-based black empowerment grouping CellSAf), Net 1 owns 15% and 10% on behalf of Cell C management and staff.
A statement issued by Blue Label says as a result of the recapitalisation plan, Cell C’s net borrowings will be reduced below R6 billion.
Brett Levy, joint CEO of Blue Label, says: “This transaction is the most significant in Blue Label’s history and marks a milestone for the Group’s strategy. As a supplier and distributor to Cell C, we have already identified multiple-synergies in the procurement chain, distribution network and provisioning of products and services.
“Along with Cell C’s quality management team, and its attractively valued and powerful assets, a recapitalised Cell C offers our shareholders compelling growth prospects, including the possibility of a separate stock exchange listing in future.”
Says Mark Levy, joint CEO at Blue Label: “We are delighted to conclude this complex transaction and take this opportunity to formally welcome Cell C to the Blue Label family. Both management teams can look forward to working closely together in unlocking commercial synergies, as well as identifying opportunities to enhance operational and financial performances. We thank the vendors and the many other stakeholders involved in bringing the transaction to fruition.”
According to Cell C the ownership of the company by South African shareholders has increased from 25% to over 86% and the participation of historically disadvantaged persons in Cell C increases from around 25% to more than 30% at ownership level.
Jose Dos Santos, CEO of Cell C, said, “We are delighted to have concluded this two-year long process for the benefit of all our stakeholders. The recapitalisation provides a sustainable growth platform for Cell C that will promote healthy competition in the South African telecom market to further drive down costs and improve our value offerings.”
The mobile network operator adds that the recapitalisation secures the employment of some 2500 full-time employees of Cell C and a further 15 000 people that are employed in the industry value chain as a result of Cell C’s operational and commercial activities.
Both Cell C and Blue Label Telecoms believe the transaction will help rejuvenate the local market and bolster local competition.
Blue Label’s commercial contracts with all other mobile networks remain unchanged.
“With the acquisition of the Cell C stake, Blue Label is positioned deeper into the telecom value chain, further protecting itself from possible disintermediation, whilst entrenching itself in its ever expanding customer base, exceeding 150,000 points of presence in South Africa alone,” reads a statement from Blue Label Telecoms.
Brett Levy and Mark Levy conclude: “A rejuvenated Cell C will now be able to play a stronger role in the vibrant telco sector of South Africa, whist the national imperative of saving and creating additional jobs will be supported.
Source: IT Web Africa