Blue Label Telecoms has signed the final equity transaction agreements to the recapitalisation of Cell C.
The company anticipates issuing an updated circular and convening a general meeting before the end of July 2017 in order to seek the approval of shareholders for the amendments to the Cell C recapitalisation.
Blue Label has obtained irrevocable undertakings from approximately 53% of shareholders to vote in favour of the Cell C Recapitalisation, including the vendor consideration placement of R2,75-billion.
Details of the amended agreements include:
* Net borrowings of Cell C to be reduced to a maximum of R6-billion (previously R8-billion);
* An increase in the Blue Label vendor consideration placement from R2-billion to R2,75-billion, at a price of R15.00 per Blue Label share;
* The Prepaid Company’s subscription remains unchanged at 45% of Cell C for a subscription price of R5,5-billion;
* The Prepaid Company has agreed to provide liquidity support, to the extent required, in the form of interest-bearing subordinated loans of up to $60 million to a special purpose vehicle set up to hold shares in Cell C.
The Cell C Recapitalisation is expected to be implemented during the first week of August 2017 as it is subject to Blue Label shareholder approval in a general meeting, as well as the fulfilment or waiver of conditions precedent.
These include:
* Regulatory approvals if and to the extent required by law; and
* The Prepaid Company confirming that it is satisfied with the composition of the net borrowings of Cell C.
