Johannesburg - Mobile services company Blue Label Telecoms [JSE:BLU] said early on Friday that it hadn't yet been served with papers regarding a court challenge against its plan to purchase a portion of cellphone network Cell C.
Blue Label is currently in the process of acquiring a 45% stake in South Africa’s third largest mobile network for R5.5bn. Cell C management and staff will also subscribe for 25% of the issued capital.
As part of the deal, Net 1 UEPS Technologies[JSE:NT1] would further subscribe to 118 million Blue Label shares for R2bn, meaning Net1 would have a 15% stake in Blue Label.
But CellSAF, which is Cell C's black empowerment partner, has reportedly said in fresh court papers that it has not been informed of the deal or given the opportunity to comment on it or consider it.
However, Blue Label said it has yet to see the court papers.
“It appears that CellSAf issued the court papers to the media before the Sheriff of the Court has served the papers on the respondents,” Blue Label told Fin24.
“Blue Label will only be in a position to comment once the document has been served and we’ve had a chance to study the content,” it said.
On Thursday, news agency Reuters reported that CellSAF, which 25% stakeholder of Cell C, launched a court challenge against Blue Label Telecoms to have the transaction set aside.
Earlier this month, Cell C withdrew a bond placement as the company was confident that it could reduce its maximum net borrowings to less than R8bn through planned restructuring.
In a circular published by Blue Label in October to shareholders, it was revealed that Cell C posted a profit of just R2.8m for the six months ended June 30 2016.
This compares to a loss of R1.15bn for the period ended June 30 2015.
The financial statements further revealed that Cell C recorded revenues of R6.96bn for the half-year period ended June 30 2016, compared to just over R6bn for the previous comparable interim period.
Meanwhile, the Blue Label circular revealed that Cell C posted a net loss of R5.6bn for year ended December 31 2015 with revenues of R13.2bn for that year.
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