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Airtime distributor becomes South African mobile operator’s biggest single shareholder.
Blue Label Telecoms this week agreed to acquire 45% of South African mobile operator Cell C for 5.5 billion rand (€354.3 million).
The airtime distributor had been discussing a recapitalisation plan with Cell C since late 2015, under which Blue Label initially planned to acquire 35% of Cell C’s share capital for ZAR4 billion.
Under the finalised plan, Blue Label’s subsidiary, The Prepaid Company (TPC), will become Cell C’s biggest single shareholder. Cell C’s current parent and Oger Telecom subsidiary, 3C Telecommunications, will reduce its stake to 30% from 100%. Meanwhile, Cell C’s management will acquire the outstanding 25% of the company.
"This transaction allows Oger Telecom and 3C to remain invested in Cell C and participate in the value creation arising from this enhanced strategic relationship," said Mohammed Hariri, chairman of Cell C and Oger Telecom, in a statement on Tuesday.
The recapitalisation will reduce Cell C’s net debt from "high-double digit numbers" to ZAR8 billion.
"The recapitalisation provides a sustainable growth platform to build on our successes as we continue to drive customer value to realise our exciting growth potential," said Cell C chief executive Jose Dos Santos.
The recapitalisation plan is expected to be implemented by 18 November.
