Monday , August 15 2022

Jonathan Beare Consortium to buy into Cell C


Cell C largest Shareholder, the Blue Label Telecoms listed on JSE, said Friday that the Buffet Consortium intends to buy a minority sharehold in Cell C that will strengthen the mobile operator's balance sheet.

The Buffet Consortium is supported by the South African revival billionaire property mogul and Jonathan Beare businessman.

Blue Label stated that Cell C had expired to a "binding final leaflet" with the consortium that it will become a minority shareholder, until certain conditions are met.

"With the help of Buffet, the Cell C balance sheet will be shaped and the sustainable growth of C C C for the future," said Blue Label in a shareholder statement.

"A further detailed announcement will be made once the parties have implemented the transaction documents needed to give effect to the principles that are recorded in the mandatory final leaflet."

It's not yet clear if the latest developments have paid Telkom's aspirations into Cell C. Managing on the face of recent months that Telkom is interested in buying Cell C, possibly in some kind of exchange-sharing arrangement that includes Blue Label.

The proposed investment comes to a Buffet on the same day that Cell C announced that its CEO, Jose Dos Santos, will step down. Dos Santos will continue to consult with C C Chapel, Kuben Pillay.

Earnings fall

In a separate statement to shareholders, Blue Label said on Friday that the heading of earnings per share for the six months ending on 30 November 2018 is expected to fall sharply compared to the same period in 2017. It could report heps' loss of as much as 18.78c, compared to a positive Heps of 166.68 a year ago.

"Although the core businesses of the Blue Label group create a positive growth, the basic financial adjustments one-off related to Cell C had a negative impact on it," he said.

"The financial results for the comparable period of six months ending on 30 November 2017 included the recognition of a deferred tax asset by Cell C, the proportion of the group equated to R864 million. This was a once-off acknowledgment to gains in the relative period. "

In addition, as part of the restructuring of C C debts to third party lenders, a Blue Label subsidiary The Purchased Company had to buy bond notes issued by a special purpose vehicle (SPV1) with a capital recovery value of US $ 21 million at a coupon rate of 8.625% per annum to consider buying $ 9 million and providing liquidity support for a second special purpose vehicle (SPV2) of up to $ 80 million in the form of undergraduate funding.

Oger Telecom, a former C-controller controller, contributed $ 36 million of $ 80 million, limiting the Company's obligation Prepared in this respect to a maximum of $ 44 million.

"SPV1 and SPV2 own 11.8% and 16% of shares issued by Cell C respectively. No other assets are held by these entities, so bonds & # 39 The group and liquidity support are settled only once Cell C proportions are realized by SPV1 and SPV2, "says Blue Label. "Blue Label has a review promise that equates to 5% of the shares issued by Cell C relating to the group's exposure to SPV2.

"In the first place, it was necessary to recognize the derivatives at fair value and then to measure fair value through profit or loss Although a CC valuation on 30 November 2018 of R13.4 billion was adequate to support the shipping value & # In its investment, it was not sufficient enough to support the relative viability of the Company Prepared to SPV1 and SPV2. As a result, there was a fair value adjustment worth a total of R493 million, R47 million of which was associated with SPV1 and R446-million to SPV2, has had a negative impact on core core earnings. The remaining values ​​of these derivatives are R121 million for SPV1 and R102 million to SPV2. "

In the meantime, an increase in the number of Blue Label shares in a subject will also boost earnings per share. The average weighted share of the shares in question rose from 806 million in November 2017 to 926 million in November 2018. Blue Label announced additional shares to fund a dividend for the acquisition of Cell C and another company, Mobile 3G.

Core is healthy

"On the prohibition of Cell C financial results and the negative impact of the SPV modifications, the group expects core headings gains of the balance of entities within the Blue Label group to be between R500 million and R521 million, to compare with R431-billion in the previous period, "he said.

"Having considered the increase in the average weighted volume of the shares in question, a core earnings heading per share of the balance of entities within the Blue Label group is expected to be between 54.01k 56.28p for the six months ending on 30 November 2018 , compared to 53.45c in the previous period, representing an increase of between 1% and 5.3% on the previous year. "

Blue Label will announce its interim results on February 28th. – – © 2019 NewsCentral Media

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