South African distributor Blue Label Telecoms’ deal to acquire a 35 per cent stake in operator Cell C remains “on track”, despite missing an initial target to complete by mid-2016.
Blue Label announced at the end of last year it would invest ZAR4 billion ($262.4 million) of new capital in Cell C, South Africa’s smallest operator, while the company’s controlling shareholder Oger Telecom would reduce its stake to around 25 per cent, from 75 per cent.
The planned restructuring and new investment would also Cell C’s debt cut significantly, with Oger Telecom also injecting new capital.
Both companies said they expected the deal to close by 1 June 2016.
With the date having passed, Blue Label joint CEO Mark Levy revealed the deal is still going ahead, according to South Africa’s TechCentral.
“As far as we are concerned everything is on track,” he said. “It’s a massive transaction from a Blue Label perspective, so we’ll ensure that all the i’s are dotted and all the t’s are crossed before we cross over.”
Cell C’s executive head of communications, Karin Fourie also said that “negotiations are ongoing”.
The report however cited some potential complications surrounding the deal. Cell C’s black empowerment partner CellSAf filed court papers in March in a bid to start a liquidation process of 3C Telecommunications, Cell C’s holding company. CellSAf accussed the company of being insolvent.
South African incumbent Telkom South Africa ended talks about an acquisition of Cell C last year, due to a reported difference of opinion over price.