Following 18 months of negotiations, Blue Label’s wholly owned subsidiary The Prepaid Company has bought a 45% stake in Cell C. The move to recapitalise Cell C was approved by shareholders at a general meeting in July, reports IOL.
“Blue Label is pleased to advise shareholders that the Cell C recapitalisation has been fully implemented, resulting in Cell C’s net borrowings being reduced to below R6 billion,” the company said in a statement.
“Blue Label, though its wholly owned subsidiary, The Prepaid Company, now owns 45% of the issued share capital of Cell C.”
With the recapitalisation, the participation of South African historically disadvantaged peoples has increased by around 5% from 25% to 30% at ownership level. And for the first time, Cell C staff and management will also now be able to participate in the company’s equity.
READ MORE: Cell C tells Telkom thanks, but no thanks
“We are delighted to have concluded this two-year process for the benefit of all our stakeholders. The recapitalisation provides a sustainable growth platform for Cell C that will promotes healthy competition in the South Africa telecoms market to further drive down cots and improve our value offerings,” Cell C CEO Jose Dos Santos said in a statement.
With the significantly reduced net debt, Cell C will also be bringing down data prices and those of other products offered by the company.
“Competition in the telecommunication industry is vital to bringing down the prices, including data prices, and under the new significantly reduced debt structure, Cell C is confident, that because of this transaction, the company can reinvigorate competition in the market,” Dos Santos said.
Blue Label will also be working towards listing Cell C on the JSE in the coming years.
Additional source: IOL