Net1 UEPS, the holding company of Cash Paymaster Services (CPS), aims to buy up 15% of Cell C, in addition to its stake in Blue Label Telecommunications which already holds 45% of the mobile telecommunications company.
By 30 June 2017, Net1 expects to have bought up 15% of Blue Label, 15% of Cell C and 49,6% of DNI-4PL Contracts.
DNI is the leading distributor of mobile subscriber starter packs for Cell C and also distributes pre-paid airtime through an extensive network of field operatives and agents.
Net1 is part of an umbrella restructure agreement with Cell C and has offered to acquire a direct stake of 15% of the issued share capital of Cell C for a consideration of R2-billion.
It has signed memorandum of understanding regarding the DNI purchase, with an option to acquire a controlling stake in DNI in the future.
The proposed investments in Cell C and DNI are subject to certain conditions, including the satisfactory completion of due diligence, the required internal and external approvals and the execution of definitive transaction agreements.
“The combination of the diverse technological, commercial and logistical capabilities of Net1, Blue Label, Cell C and DNI provides a substantial and compelling business case for us,” says Serge Belamant, chairman and CEO of Net1.
“We are very excited about concluding these transformational transactions and will provide further details regarding the rationale for these transactions, the final consideration paid and the funding structure when the transactions close.”
CPS is the company at the centre of the social grants controversy currently unfolding. CPS and SASSA has opened negotiations to extend the current contract, but the Constitutional Court may still deny this option.