Following speculation earlier this week, Telkom has advised shareholders that it is indeed in discussions with Cell C regarding the acquisition of Cell C.
This is not to say that Telkom will ultimately acquire the embattled network operator as talks are still very much in a preliminary stage.
“Telkom has substantially concluded its due diligence, however discussions are at a preliminary stage. The Potential Acquisition will be subject to Cell C completing a financial restructuring to ensure that its gearing levels are reduced to a sustainable level as specified by Telkom and commercial contractual relationships are renegotiated to terms acceptable to Telkom,” Telkom said in a notice to shareholders.
The potential acquisition is also subject to a number of regulatory approvals, a fact the Independent Communications Authority of South Africa (ICASA) made known earlier this week when rumours were running rampant.
“ICASA appreciates and welcomes the efforts and measures being taken to ensure the continued existence of Cell C,” the authority said earlier this week.
“Notwithstanding the various media reports, ICASA is yet to be notified of any transactions by any of the licensees. In this regard, ICASA would like to caution all parties to ensure that the necessary regulatory compliance requirements pertaining to purported transactions are adequately fulfilled,” the authority added.
As of time of publication ICASA has not commented on the statement issued by Telkom.
As for Cell C, it has confirmed it has received a non-binding offer from Telkom.
“Cell C confirms that it has received a non-binding offer from Telkom. Cell C remains focused on ensuring operational efficiencies, restructuring its balance sheet, implementing a revised network strategy and improving overall liquidity,” the network operator said in a statement.
“Independent financial and legal advisers have been appointed representing the lenders and constructive discussions on the recapitalisation are underway with them and other stakeholders in respect of various proposals,” Cell C concluded.
Will this be the start of the Cell C ship being righted? We’ll have to wait and see how the discussions between it and Telkom pan out.