Blue Label Telecoms has stated that its planned acquisition of a 35% stake in Cell C is still “on track” although it was aiming to close the deal by mid-2016.
At the end of last year, the South African distributor confirmed an investment of ZAR4 billion ($262.4 million) of new capital into Cell C, which is the country’s smallest operator.
Meanwhile, Oger Telecom – which is Cell C’s majority shareholder – will significantly reduce its stake in the operator, from 75% to 25%. It will also provide new capital as part of the restructure, lowering Cell C’s debt.
The firms had aimed to conclude the agreement by 1st June 2016, and despite the missed deadline Blue Label joint CEO Mark Levy has stated that the deal is still on, saying: “As far as we are concerned everything is on track. It’s a massive transaction from a Blue Label perspective, so we’ll ensure that all the i’s are dotted and all the t’s are crossed before we cross over.”
Cell C’s executive head of communications Karin Fourie confirmed that “negotiations are ongoing”.
One potential stumbling block for the deal is the accusation from CellSAf – Cell C’s partner focused on black empowerment – that Cell C’s holding company 3C Telecommunications was insolvent. In March CellSAf attempted to begin the liquidation of 3C by filing court papers.
A mooted acquisition of Cell C by incumbent Telkom was abandoned last year after the parties failed to agree on a price.