Cell C to be sold to Blue Label Telecoms and staff

Blue Label Telecoms announced it has put in an offer to buy a 35% stake in Cell C for R4 billion.

The offer is part of a proposed recapitalisation of Cell C, which Blue Label said it plans to participate in with other investors.

After the deal is implemented, Cell C’s debt is to be reduced to a maximum of R8 billion.

A meeting of the board of directors of Cell C is being convened to consider the offer.

The Proposed Transaction is subject to, among other things:

  • The execution of definitive transaction agreements typical for a transaction of this nature.
  • The securing of funding by all parties to the Proposed Transaction.
  • Cell C’s aggregate net borrowings being reduced to a maximum of R8 billion following the conclusion of the Proposed Transaction.
  • The obtaining of all requisite regulatory approvals.

Management on behalf of the employees of Cell C has also submitted a binding offer to co-invest in the company with Cell C’s current shareholder 3C Telecommunications Proprietary Limited (3C Telecommunications) and Blue Label.

Cell C employees will then hold around 30% of the total issued share capital in Cell C at a cost of R2.5 billion at the conclusion of the restructuring programme.

If successful, the restructuring will result in 3C Telecommunications holding 35%, management and staff 30%, and Blue Label 35% of the ordinary shares in Cell C.

The expected date of the proposed transaction is 1 June 2016.

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Cell C to be sold to Blue Label Telecoms and staff