Blue Label Ups Economic Interest In Cell C To 73
Alongside its interim financial results for the six months to end-November 2024, published on Thursday, JSE-listed Blue Label revealed the increased economic interest in the business.
In 2022, Cell C transferred its debt to a new entity called SPV5 in exchange for the latter owning 10 of Cell C. Blue Label guaranteed the debt repayment, and another company, The Prepaid Company, a Blue Label subsidiary that holds the groups stake in Cell C, agreed to provide R275-million to SPV5 to help pay off the debt. The debt will be settled in tranches between December 2024 and December 2026.
Blue Label issued a guarantee in favour of the lessor for the repayment of this debt, while TPC committed to providing R275-million in funding to SPV5 in exchange for a claim of R699-million in SPV5, enabling it to meet its repayment obligations," Blue Label said.
On 31 December 2024, TPC advanced the first tranche of funding - an amount of R100-million. The remaining funding commitments are scheduled as follows:
- R100-million on 31 December 2025
- R50 million on 31 December 2026 and
- An additional R25-million on 31 December 2026, contingent upon the occurrence of certain liquidity events.
"SPV5 is required to repay TPC for the amounts advanced from any future sale of shares and/or from dividends earned thereon, along with an additional R424-million plus 50 of the fair value of its 10 shareholding in Cell C, to the extent that the proceeds exceed R699-million," Blue Label said.