Blue Label and Net1 have completed the R7.5bn acquisition of a 60% shareholding in Cell C, paving the way for the turnaround of the struggling entity. Blue Label, which distributes cellphone airtime vouchers and SIM-card starter packs, owns 45% of Cell C while electronic payment provider Net1 holds 15%. The entity 3C Telecommunications, Cell C’s founding shareholders, will own 30%, while the balance will be held by management and staff. The transaction is expected to substantially reduce Cell C’s debt to R6bn from about R23bn. The tie-up will also give Cell C some financial headroom that could strengthen its competitiveness. Cell C did not have enough internal resources for aggressive growth to keep up with much bigger and cash-flush competitors.
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