Cell C’s black economic empowerment shareholder, CellSAf, director Zwelakhe Mankazana has vowed to continue to fight the mobile phone operator’s recapitalization deal with Blue Label and Net1.
“Do not expect CellSAf to back down,” said Mankazana in an opinion piece published in the City Press newspaper.
“We will not let opportunistic, money-grubbing executives hijack the company or corporate pirates to capture it.”
On November 12, 2015, Blue Label made a direct offer to Oger Telecoms on behalf of itself, management and staff, and a mystery investor (identified later as Net1) to collectively acquire 70% of Cell C.
CellSaf has been opposing the transaction from the date that it first became aware of it: December 10, 2015.
Mankazana reiterated in his opinion piece that the “so-called recapitalisation may well be the most blatant attempt at corporate hijacking in recent South African history”.
“We estimate that the effective 8.8% of Cell C which Oger “sold” to the Employee Believe Trust (as part of Cell C’s attempt to raise BEE to above the 30% required by Icasa to transfer control of a licence) for a nominal R10, will load the trust with debt of over R7 billion, growing to R9 billion with interest.
“On the other hand, Blue Label and Net1 pay R7.5 billion for 60% of Cell C and four white, male managers pay R2 500 for 5% (worth almost R1 billion, at a recent valuation of R19 billion for Cell C by Standard Bank Securities).”
Mankazana wrote in the City Press opinion piece that if you ask Cell C or Oger for detailed information regarding the recapitalisation, or to explain Cell C’s new “greater than 30%” BEE shareholding, or to clarify the financing of the deal, and they will respond that the information is confidential.
“CellSAf is of the view that anyone wanting to hand over or acquire ownership of an empowered, licensed mobile operator must explain themselves in an open court and in public hearings. Spectrum remains a highly prized national asset and we have a responsibility to ensure it is not bartered by what we deem a fleeing, bankrupt foreign investor.”
CellSaf is contesting the matter in the high court and has lodged complaints with the Competition Commission and communications watchdog ICASA (Independent Communications Authority of South Africa).
In November 2016, CellSAf issued the summons in the High Court of South Africa against the then parties to the recapitalisation transaction seeking to have the agreements that had been signed prior to that date set aside.
“If this matter is ever heard by the Court on the merits of CellSAf’s claim, this is unlikely to be before 2019,” said Cell C.