The Cell C deal with Blue Labe and Net 1 has been given a go-ahead by South Africa’s communications regulator, ICASA.
The country’s third biggest mobile phone operator said in a statement late on Wednesday that it welcomes ICASA’s confirmation that it followed the correct process in the notification of its recapitalisation transaction and that it has complied with all applicable regulations.
“A recapitalised Cell C is good for the industry, the economy, and the consumer at large,” says Jose Dos Santos, Cell C CEO.
“The successful conclusion of this transaction has ensured a sustainable future for the company and its employees. We now have a solid foundation to really drive competition in an industry that has been marred by a duopoly at the expense of the consumer,” adds Dos Santos.
The mobile phone firm said the recapitalisation of Cell C has increased the ownership of the company by South African shareholders from 25% to over 86%.
“The participation of historically disadvantaged persons in Cell C increased from around 25% to more than 30% at ownership level, with Cell C management and staff participating in the equity of the company for the first time,” said Cell C.
Cell C’s empowerment partner CellSAf has warned that the recapitalisation of the mobile phone operator amounts to a blatant attempt at corporate capture, and is likely to collapse under regulatory scrutiny.
CellSaf has been opposing the transaction from the date that it first became aware of it: December 10, 2015.
CellSaf declared that the recapitalisation of the mobile phone operator amounts to a blatant attempt at corporate capture, and is likely to collapse under regulatory scrutiny.
According to a report by the City Press, CellSaf is contesting the matter in the high court.
CellSAf: High Court Litigation
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.
CellSAf founded Cell C 16 years ago along with the now-bankrupt Middle-Eastern conglomerate, Saudi Oger.
After more than 2 years of obfuscation, secret negotiations and numerous contraventions of the Companies Act, Cell C management, Net 1 and Blue Label announced the conclusion and “approval” of the recapitalisation transaction on 07 August 2017, CellSAf said in a statement two months ago.