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Blue Label Telecoms acquires 35% stake in Cell C for R4 billion

Only a couple of weeks after Telkom decided not to pursue a deal that would have seen the fixed and mobile line giant acquire a stake in South Africa’s third mobile operator Cell C, Blue Label Telecoms has swooped in to buy a 35% stake – for R4 billion.

According to TechCentral, the acquisition is part of a restructuring plan at Cell C, that will see the company being divided into three shareholding parts: 35% for Blue Label, a reduction down to 35% for current controlling shareholder Oger Telecom, and the remaining 30% going towards Cell C staff.

The buy-in also falls within Cell C’s plans to significantly reduce the company’s debt with the aim of moving it to below R6 billion in the next 12 months.

The deal isn’t official yet, as it needs to go through all the right processes first before being approved.

“The restructuring is subject to conditions precedent, including the execution of agreements typical of a restructuring of this nature and the obtaining of all requisite regulatory approvals,” it said in a statement.

Blue Label Telecoms is currently in various deals with MTN and Vodacom, but CEO Mark Levy is certain that it won’t interfere with those.

“We have no intention of breaching the contracts we have or breaking these relationships that we have developed for so many years. As management, we are quite happy we are able to separate our investment strategy from driving business on a day-to-day basis. The operators should not view this as a negative thing,” he told TechCentral.

While Blue Label Telecoms’ R4 billion will go a long way to reduce Cell C’s debts, Oger Telecom has also agreed to pump some cash into the business to help reduce it further.

[Image – CC by 2.0/Michael Hilton]

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