Net1 CEO Herman Kotzé terminated the group’s R2bn deal with Blue Label Telecoms on his first day of the job.
Net1 and Blue Label issued separate statements on Thursday morning saying a deal announced in October 2016 — whereby Net1 would assist Blue Label acquire 45% of Cell C — had been halted.
Under former CEO Serge Belamant, who stepped down on Wednesday, Net1 had agreed to buy 15% of Blue Label by subscribing for 118-million shares at R16.96 each.
Blue Label’s share price has subsequently declined to R15.70 at Wednesday’s closing price.
Blue Label announced it had secured unnamed replacement investors, which had agreed to buy R2bn worth of its shares at R15 each.
Net1 said in its statement that it had been released from a R2bn loan guarantee from FirstRand its obtained to secure the deal with Blue Label.
Net1 said it was proceeding with its previously announced investment of R2bn in Cell C directly for a 15% stake, and was also proceeding with its previously announced negotiations to acquire part of DNI-4PL Contracts.
"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," Net1 said.
"The company intends to settle the purchase consideration for these two investments using a combination of surplus cash and debt. The company does not intend to issue any shares of common stock to fund these two investments."