Cell C restructuring faces legal challenge
Cell C’s empowerment partner CellSAf has decided to challenge the mobile operator’s multibillion-rand restructuring and recapitalisation in the courts, according to a report.
Cell C’s empowerment partner CellSAf, which holds a quarter of the mobile operator’s equity, has decided to challenge a multibillion-rand restructuring and recapitalisation in the courts, it was reported on Thursday.
According to Business Day, CellSAf has filed an application at the high court seeking the liquidation of Cell C’s immediate parent company, 3C Telecommunications. This is after CellSaf was reportedly not consulted on a plan to recapitalise the business.
TechCentral reported in December that JSE-listed Blue Label Telecoms had agreed to acquire 35% of Cell C, injecting R4bn in new capital as part of a major restructuring that would lead to controlling shareholder Oger Telecom diluting its stake from 75% to roughly 27%.
CellSAf’s stake would also be reduced, with 3C Telecommunications (made up of CellSaf and Oger Telecom) holding 35% of Cell C after the restructuring. Under the proposed deal, the remaining 30% of Cell C would be bought by staff and management.
Under the restructuring, Cell C’s debt would be reduced “significantly”, to less than R8bn.
According to Business Day, Oger Telecom has argued that CellSAf’s application to the courts appears to have been “undertaken by certain individuals in CellSAf that were acting solely in their own interests” and said the application has no merit and is “frivolous, vexatious and an abuse of court processes” and will be “vigorously opposed” by 3C Telecommunications. — © 2016 NewsCentral Media