Blue Label said it was part of a consortium that would acquire all of Cell C, thereby re-capitalising SA's third cellphone network to cut its debt to a maximum of R8bn.
The deal would allow Cell C's existing holding company 3C Telecommunications - which is 75% owned by Saudi construction group Oger with a black economic empowerment (BEE) partner owning the balance - to reduce its stake to 30%. Cell C's management would buy 10% and Albanta Trading another 15% of the cellphone network.
Blue Label said it would invest in Cell C via its subsidiary The Prepaid Company (TPC). The R3.5bn outstanding after the R2bn it raises by placing shares with Net1 would be paid from existing funding facilities, it said. "Blue Label has, for a number of years, acted as one of the primary distribution channels for Cell C. This has resulted in the development of a strong relationship between Blue Label and Cell C," it said in Wednesday's statement.
Cell C had grown its subscriber base from 9-million in 2012, when new management was introduced, to more than 25-million, Blue Label said.
"Cell C's network, currently consisting of more than 4,800 sites, addresses SA's core voice segments, with 98% of the population covered. Cell C also offers 3G, LTE and LTE-A data services to subscribers and it continues to invest in its network and LTE roll-out in order to capture the substantial growth opportunity that the South African market offers," the statement said.
Net1 said in a statement on Wednesday morning it intended combining its South African infrastructure with Blue Label's.
"We believe that our coalition will be a global first that provides customers with an offering that includes banking, transacting, debit and credit cards, micro-finance, insurance, distribution of both airtime and electricity, web services, voice and data as well as access to low-cost handsets offering the most advanced functionality," Net1 chairman and CEO Serge Belamant said in the statement.
Source: BDpro
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