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JOHANNESBURG, Feb 22 (Reuters) - Blue Label Telecoms said on Friday a consortium had agreed to take a minority stake in South Africa’s third largest mobile carrier Cell C, of which it owns 45 percent.
Blue Label, which has been trying to dig Cell C out of debt since it purchased its stake in the carrier for 5.5 billion rand ($392.28 million) in October 2016, said the deal would help the struggling company.
It named the investor as The Buffet Consortium, but did not say who that included and Reuters was not immediately able to establish its members. Blue Label Telecoms also did not disclose the size of the stake or how much it would raise.
“With Buffet support the Cell C balance sheet will be bolstered,” it said in a statement.
A further detailed announcement would be made at a later stage, it said, adding the transaction remained subject to certain conditions.
Blue Label said last August that Cell C, which has struggled to compete with bigger rivals MTN and Vodacom needed another 2.8 billion rand in funding.
It has had to defend its investment to shareholders concerned about the cost of keeping the carrier going, prompting an almost 65 percent fall in Blue Label’s share price since the start of last year. ($1 = 14.0206 rand) (Reporting by Emma Rumney; Editing by Kirsten Donovan and Emelia Sithole-Matarise)