In South Africa, the Competition Commission has granted its endorsement for Blue Label Telecoms subsidiary, The Prepaid Company, to acquire a controlling interest in Cell C, subject to certain conditions.
These conditions, recommended to the Competition Tribunal, address concerns related to information exchange and ensure the continuity of specific prepaid airtime distribution channels post-transaction.
The Commission emphasized that the proposed merger does not raise significant public interest concerns. Blue Label and Cell C sought approval from South Africa’s regulatory bodies to increase The Prepaid Company’s ownership in the struggling mobile network operator from 49.53% to 63.19%.
In a communication to the telecommunications regulator, Icasa, Cell C outlined that The Prepaid Company had infused US$292 million in funding into the operator, settled creditors’ claims, and extended a US$54 million loan. With this recent financial injection, The Prepaid Company now holds a 63.19% stake in Cell C, although its voting power remains capped at 49.53% pending approval from Icasa and the Competition Tribunal.
Despite holding a significant portion of Cell C’s shares and bearing most of its debt, Blue Label Telecom clarified that it does not wield control or have a decisive influence over its management. The company underscored its commitment to Cell C’s success, citing its substantial investment and interest in safeguarding the value of its stake.
According to Blue Label Telecom, The Prepaid Company seeks a controlling interest in Cell C to effectively oversee its recovery, given the substantial investments made.
