Blue Label announced on Monday that it has completed its recapitalisation of mobile phone operator Cell C.
The company’s recapitalisation has resulted in Cell C’s net borrowings reduced to R6 billion.
South African-based Blue Label said through its wholly-owned subsidiary, The Prepaid Company, now owns 45% of the issued share capital of the mobile phone operator.
The JSE-listed telecommunications group also announced that The Prepaid Company has implemented the acquisition of 47.37% stake in 3G Mobile for R900 million
The acquisition of the remaining 52.63% for R1 billion is subject to regulatory approvals and the first acquisition becoming unconditional.
3G Mobile is one of Africa’s largest distributors, and financiers, of mobile devices and handsets to major retailers and cellular network providers.
It operates in 8 African countries, with offices in South Africa, Namibia, Botswana, Mauritius and distribution channels into Zambia, Zimbabwe, Swaziland and Lesotho. It has distribution rights for all major tier one and tier two mobile device and handset manufacturers, including, inter alia, Apple, Samsung, Huawei, HiSense, ZTE and Nokia.
Through its wholly-owned subsidiary, Comm Equipment Company (CEC), it provides the financing of the mobile handset component of post-paid contracts to cellular network providers such as Cell C.
At present, the CEC finance book is a R3 billion.
3G Mobile shall be utilised as Blue Label’s expansion platform into the financing and supply of mobile devices, handsets and allied products. Both of these functions supplement Blue Label’s strategic objectives to provide value added services to both Cell C and its own customer base.
Brett Levy, joint CEO of Blue Label, says: “The acquisition of 3G Mobile is earnings accretive from the get-go. 3G Mobile will provide a solid foundation for handset and tablet distribution in complementing our existing range of mobile products and services, now all housed under one roof, serving South Africa and beyond.”
Our existing handsets and tablets distribution business comprises both new and refurbished hardware. With the addition of 3G Mobile’s top tier branded mobile devices, Blue Label will be able to offer a complete range, from no-name/house brands right through to branded Tier 1 products, thereby catering for all types of consumers.”
“Our strategy takes another step forward with the acquisition of 3G Mobile. Of the R1.9 billion purchase price, R900 million was settled as to R250 million in Blue Label shares plus R650 million in cash, while the remaining 52.63% tranche will be settled in R1 billion cash,” says Mark Levy, joint CEO at Blue Label.
“The acquisition of 3G Mobile aligns perfectly with Blue Label’s strategy of provisioning products and services to any channel and any customer, through a myriad of payment options.
“We welcome 3G Mobile to the Blue Label family and look forward to its contribution in transforming our business model into a vertically integrated telecoms Group.”