Blue Label seeks new investors for Cell C


Blue Label Telecoms Ltd. is considering new potential investment deals at Cell C Pty Ltd. after launching a first-half loss caused in part by its stake in South Africa's third-largest mobile phone company.

Blue Label led the Cell C rescue two years ago but the decision has not yet been rewarded as the unit faces debts and dominance from larger rivals Vodacom Group Ltd. and MTN Group Ltd. Cell C hit 1, 05 billion rand (US $ 75). million) of Blue Label's first-half profits, said the long-time service provider based in Johannesburg fell 21 percent, the highest since 2008.

Cell C needs more resources, and Blue Label is considering several potential deals that would build on last week's deal with investment firm Buffett Group, according to chief executive Mark Levy.

"The recent transaction will provide us with additional balance support for Cell C and will help us meet potential capital needs," Levy said in an interview.

He declined to comment on the details of new business. Telkom SA SOC Ltd., South Africa's largest fixed-line provider, is interested in making an offer, people familiar with the matter said last year.

Since Blue Label bought Cell C as part of the RB5.5 billion recapitalization deal, about two-thirds of its value was eliminated because of concerns that the investment would be a drain on finance. Blue Label needs to boost Cell C's balance sheet, renegotiate debt interest terms, as well as consider any offerings from investors, Levy said.

The Blue Label increased losses and fell 21 percent at 4.84 rands at 3:45 p.m. in Johannesburg, valuing the group at 4.4 billion rands.

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