CHANGE IN SHAREHOLDING
CellSAf awaits Icasa decision on Cell C recapitalisation deal
Cell C’s empowerment investor, CellSAf, said on Thursday it was still waiting for the Independent Communications Authority of SA (Icasa) to tackle its concerns about the mobile network operator’s recapitalisation deal.
Blue Label and Net1 recently bought 45% and 15% stakes in Cell C, respectively, in a move that was hailed as a lifeline for the indebted company.
Icasa said last week its investigations into the deal found that Cell C followed the correct process in notifying regulators of a change in shareholding and that the deal did not amount to a transfer of control. However, it was still considering other complaints lodged by CellSAf, according to a letter from the regulator seen by Business Day.
Blue Label said Icasa had confirmed Cell C "has complied with all applicable regulations".
"The recapitalisation of Cell C has been hugely successful in that it promotes the interests of the economy, the telecommunications industry and the consumer," Blue Label said.
But CellSAf said Icasa was yet to provide reasons for its decision and that the regulator "has not yet dealt with the substance of the complaint against the Cell C recapitalisation". The deal "breaks the law", according to CellSAf. Cell C contravened its licence conditions, breached competition rules and unlawfully reduced its broad-based black economic empowerment shareholding and control, CellSAf said.
"Icasa has taken a decision on one peripheral aspect, which is notification of the change of shareholding, but it has not provided its reasons, nor has it considered and ruled on the legality of the actual change in shareholding or any of the other aspects of our complaint," said CellSAf chairwoman Daphne Mashile-Nkosi.
Following the recapitalisation, CellSAf owns 25% of 3C Telecommunications, which in turn owns 30% of Cell C. CellSAf’s effective stake has been reduced to 7.5%. The empowerment vehicle owned 40% of Cell C’s licence when the mobile service provider was launched, though its stake was reduced to 25% in 2005 when it settled various debt obligations. CellSAf said Cell C’s licence conditions stipulated that Icasa had to provide written approval for a reduction of its ownership to below 25%, or for its 25% control of 3C and Cell C boards to be reduced.