Blue Label has informed shareholders that the recapitalisation of Cell C is complete, making it a 45% shareholder of the network operator.
Blue Label own the stake through its subsidiary The Prepaid Company.
The recapitalisation has reduced Cell C’s net borrowings to under R6 billion, said Blue Label.
It first announced the deal at the end of 2015, with a plan to buy a 35% stake in Cell C for R4 billion. In 2016, Blue Label announced it would take a 45% stake in Cell C.
The amended agreements Blue Label took to shareholders included:
- 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.
“At the close of the transaction, Blue Label Telecoms holds 45% in Cell C, 3C Telecommunications 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), Net1 15%, and 10% on behalf of Cell C management and staff,” said 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.”
Blue Label also announced that its acquisition of 47.37% of 3G Mobile for R900 million has been completed.