Virgin Mobile South Africa announced today that its board has agreed to a ‘shareholders restructuring’ whereby Cell C will sell its 50% stake in Virgin Mobile, and Virgin Group of the UK (Virgin) will increase its stake from 50% to 55% and Calico Investments of the Bahamas (Calico) will acquire the remaining 45% stake in the Company.
Calico, an investment company, plans to develop a strategic relationship with Virgin Mobile and together with Virgin, will invest additional growth capital into Virgin Mobile. This will enable Virgin Mobile to offer a wider range of improved products and services to its growing customer base in South Africa.
The transaction is still subject to certain conditions including South African Competition Commission and Exchange Control approvals. Closing is expected by April 2011.
Cell C will continue as Virgin Mobile’s network partner in terms of an updated and expanded network services agreement.
“Virgin Mobile has shown consistent high subscriber growth and has significantly increased its base of higher ARPU (‘Average Revenues Per Subscriber’) post pay subscribers in South Africa over the last two years. It is time for us to capitalise on this growth and bring in an additional shareholder to invest in Virgin Mobile’s further expansion, which will enable us to deliver more exciting products and services to our valued customers. We also look forward to leveraging our updated network agreement with Cell C to provide improved performance to our customers,” said Steve Bailey, CEO, Virgin Mobile.
“Calico looks forward to working with Virgin Mobile to develop the business through the expansion of its offerings. Virgin Mobile has shown an ability to differentiate itself from the competition and, with our intended investment, there will now be even more potential to increase the range of quality products and services Virgin Mobile can offer going forward.” said Faisal Al Bannai, a director of Calico Investments.
“Cell C has been and will continue to be a strong partner of Virgin Mobile. The change in shareholding is part of Cell C’s strategy of providing a platform for growth for MVNOs, backed up by our award-winning HSPA+ 900/2100 network.” said Lars P Reichelt, CEO, Cell C.
Gordon McCallum, Virgin Management Limited CEO, said “Virgin and Cell C have invested substantially to establish Virgin Mobile in the South African market. It is gratifying to see it now move into this second phase of development as the first fully independent MVNO in South Africa. With our new shareholder on board and the network services agreement in place with Cell C, we expect Virgin Mobile to grow and deliver what the Virgin brand is renowned for – exceptional value, innovation and customer service.”
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