Cell C and Blue Label enter binding agreement
Blue Label Telecoms has told shareholders that a “binding umbrella restructure agreement” has been entered into by the company and Cell C.
“Blue Label, Cell C, debt providers of Cell C, a third-party investor, and other relevant parties” are part of the agreement, which will see:
- Maximum net borrowings of Cell C reduced to approximately R6 billion.
- The third-party investor is to subscribe for 15% of the share capital of Cell C for R2 billion.
- Blue Label’s subscription for 45% of the share capital of Cell C remains unchanged.
The binding restructure agreement is subject to the conclusion of the relevant transaction agreements, which agreements are expected to be unconditional by no later than 30 June 2017,” said Blue Label.
Shareholder fight
The announcement comes after Cell C’s black equity partner CellSAF reportedly threatened to prevent the deal from taking place.
CellSAF holds a 25% stake in the firm that owns Cell C, 3C Telecommunications.
Should the planned deal go through, CellSAF’s indirect shareholding in Cell C would be reduced to 7.5%.
CellSAF chairman Mathews Phosa said diluting Cell C’s black equity would be “illegal and improper”, according to a report by BusinessDay.
The report stated that CellSAF has approached ICASA to stop the deal going ahead.
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