A new era dawn at Blue Label

07 August 2017

‘Today marks a milestone for Blue Label.’

Blue Label is pleased to advise that Cell C’s recapitalisation has been fully implemented as of today, with the effect that Blue Label’s now owns a 45% stake in Cell C.

Blue Label has taken an immense step forward in its growth strategy by transforming its business model into a vertically integrated telecoms group. Last week, shareholders gave approval to buy a 45% stake in mobile network operator Cell C for R5.5 billion.

As a result of the recapitalisation plan, Cell C’s net borrowings will be reduced below R6 billion. With a cleaner balance sheet, Cell C will be in a stronger position to compete across its many consumer fronts.

Brett Levy, joint CEO of Blue Label, says:
“This transaction is the most significant in Blue Label’s history and marks a milestone for the Group’s strategy. As a supplier and distributor to Cell C, we have already identified multiple-synergies in the procurement chain, distribution network and provisioning of products and services.

“Along with Cell C’s quality management team, and its attractively valued and powerful assets, a recapitalised Cell C offers our shareholders compelling growth prospects, including the possibility of a separate stock exchange listing in future.”

Says Mark Levy, joint CEO at Blue Label:
“We are delighted to conclude this complex transaction and take this opportunity to formally welcome Cell C to the Blue Label family. Both management teams can look forward to working closely together in unlocking commercial synergies, as well as identifying opportunities to enhance operational and financial performances. We thank the vendors and the many other stakeholders involved in bringing the transaction to fruition.”

Blue Label’s commercial contracts with all other mobile networks remain unchanged.

With the acquisition of the Cell C stake, Blue Label is positioned deeper into the telecom value chain, further protecting itself from possible disintermediation, whilst entrenching itself in its ever expanding customer base, exceeding 150,000 points of presence in South Africa alone.

Brett Levy and Mark Levy conclude: “A rejuvenated Cell C will now be able to play a stronger role in the vibrant telco sector of South Africa, whist the national imperative of saving and creating additional jobs will be supported.

The magnitude of the transaction is a well-aimed vote of confidence for Blue Label’s business strategy, as well as providing additional benefits to all consumers across South Africa.“