JOHANNESBURG, May 21 (Reuters) - South African telecoms company Cell C plans to hive off some assets into a new special purpose vehicle called Gatsby, the country’s competition watchdog said on Thursday, adding that it has approved the plan subject to conditions.
Cell C, which is majority owned by Blue Label Telecoms , is looking to restructure its balance sheet for the second time in about five years. It has sent a recapitalisation plan to the Competition Commission for approval but it was not clear if the creation of Gatsby was part of the recapitalisation plan.
Gatsby SPV has been set up for the sole purpose of entering into the proposed transaction, the Commission said in a statement. It did not give details about the deal or indicate which assets of Cell C, South Africa’s third-biggest telecom operator, may be sold to Gatsby.
The Commission said Gatsby SPV will be controlled by a trust that is yet to be formed.
As that may raise competition concerns, the Commission said it recommends that Gatsby SPV and/or the trust will not be owned or controlled by companies that compete or may compete with Cell C or firms that have a customer-supplier relationship with Cell C.
On Wednesday Cell C said it could not comment on its recapitalisation plan until the plan has been approved.
The company was not immediately available for comment on Thursday.
Earlier this year Cell C defaulted on a series of debt payments having underperformed in a highly competitive market dominated by MTN and Vodacom. (Reporting by Nqobile Dludla; Editing by Susan Fenton)