Blue Label bids adios to Mexico


Blue Label bids adios to Mexico

Published Date: 2020-09-18 | Source: Stephen Gunnion | Author: Stephen Gunnion

Blue Label bids adios to Mexico

The company is selling its non-controlling interest in Mexico as its focuses on its local distribution businesses.

Blue Label Telecoms has reached a deal to sell its minority stake in its Mexican business so it can pay down debt and focus on its SA distribution businesses. It's selling the 47.6% interest in Blue Label Mexico to co-shareholder Grupo Bimbo for $11.5 million (R187 million).

Blue Label Mexico is a multi-carrier for all networks. Its product offerings include pinless recharge, direct top-up, bill payments, cash collections, card acquiring, digital food vouchers, sim card distribution, debit and credit card acceptances and international money transfers. Part of its strategy is to redeploy underperforming devices and to retrofit mature devices to include financial services transaction capabilities in order to assist its business partners to become more competitive and productive.

Blue Label's stake in the Mexican business was worth R138 million at the end of May. Its equity accounted loss after tax attributable to the investment amounted to R5.81 million, down from R24 million the year before. It attributed the positive turnaround to various initiatives that were implemented in the last quarter of the previous financial year. When it released its results at the end of last month it alerted shareholders to the sale negotiations.

The company said the proceeds, which are taxable under Mexican legislation, would be used towards the settlement of various debt obligations.

Blue Label's shares closed 0.9% down at R3.20 yesterday.

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