Blue Label prepares to take Cell C deal to shareholders

Blue Label Telecoms’ board of directors has signed the final equity transaction agreements to the recapitalisation of Cell C.

“Blue Label anticipates issuing an updated circular, and convening a general meeting before the end of July 2017 in order to seek the approval of shareholders for the amendments to the Cell C recapitalisation,” it said.

“Blue Label has obtained irrevocable undertakings from approximately 53% of shareholders to vote in favour of the Cell C recapitalisation, including the vendor consideration placement of R2.75 billion.”

The company said the amended agreements include:

  • Net borrowings of Cell C to be reduced to a maximum of R6.0 billion (previously R8.0 billion).
  • An increase in the Blue Label vendor consideration placement from R2.0 billion to R2.75 billion, at a price of R15.00 per Blue Label share.
  • The Prepaid Company Proprietary Limited’s subscription remains unchanged at 45% of Cell C for a subscription price of R5.5 billion.
  • The Prepaid Company has agreed to provide liquidity support, to the extent required, in the form of interest bearing subordinated loans of up to $60 million to a special purpose vehicle set up to hold shares in Cell C.

“The Cell C recapitalisation is anticipated to be implemented during the first week of August 2017 as it is subject to Blue Label shareholder approval.”

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Blue Label prepares to take Cell C deal to shareholders