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Cell C wants to cut its debt by 73 percent as part of a deal that will help the company sell a stake to Blue Label Telecoms while retaining its operating licence, according to two people familiar with the matter.

The proposed transaction will see Cell C split about R9 billion of borrowings into three special purpose vehicles (SPV), said the people, who asked not to be identified because the talks are private. Alongside stake sales to Blue Label and payment services provider Net1 UEPS Technologies Inc, the plan will cut the overall debt to R6bn from about R22bn, they said. The SPVs will take on debt held by South Africa’s Nedbank Group, a group of Chinese lenders, and a 400million bond issued by Cell C that matures in July next year, they said. In exchange, the vehicles will control a combined 30 percent stake in Cell C. The proposal is the latest attempt by Cell C to push through the sale of a 45 percent shareholding to Blue Label for R5.5bn, a deal agreed in October after almost a year of talks. CellSAf, which is black-controlled and owns 25 percent of Cell C, argues such a transaction would unfairly dilute its shareholding and goes against black economic empowerment. Cell C declined to comment.