Cell C prepares for JSE listing

Blue Label’s interest in Cell C started in August 2017, when the company signed its biggest deal ever by acquiring 45% of Cell C for R5.5 billion.

This acquisition was done during a restructuring process that also created three special-purpose vehicles to store the distressed company’s debt.

At the time, Blue Label co-CEO Brett Levy said they were positive about a turnaround in Cell C’s financial and operational performance.

However, Cell C has remained a drag on the company’s results since, and in 2020, Blue Label had to write down its investment in Cell C to zero.

While there are some signs of recovery today, the mobile operator is still technically insolvent in its latest results for the 2025 financial year.

In May 2025, Blue Label announced that it is considering a restructuring that could see it list Cell C on the JSE.

Specifically, the company is exploring a potential restructuring of the group, which it believes will facilitate a separation and potential future listing of Cell C on the prime segment of the JSE’s Main Board.

On Monday, 1 September, Blue Label provided a further update on Cell C’s pre-listing restructuring.

This restructuring will involve Blue Label subsidiaries, The Prepaid Company (TPC) and Comm Equipment Company (CEC), and include the following key elements:

• The conversion of various claims totalling R3,676,852,511 held by TPC against Cell C into Cell C equity shares
• The transfer of 100% of the shares in CEC by TPC to Cell C in exchange for Cell C equity shares, which exchange will occur at a price of R2,150,000,000
• The transfer of airtime with a sales value of between R7,300,000,000 and R7,500,000, including VAT (the exact value to be determined by TPC), from TPC to Cell C in exchange for Cell C equity shares
• The acquisition by TPC of the shares in Cell C held by SPV4 and SPV5 in settlement of the debt obligations of those entities to TPC
• The Cell C ListCo Flip-Up, whereby Cell C shareholders will exchange their Cell C shares for Cell C ListCo shares in preparation for the future listing of Cell C ListCo

Blue Label said it will also ensure that the Cell C management team has an appropriate management incentivisation structure as part of the listing preparation.

Good news for shareholders

Blue Label emphasised that the Cell C listing is not a done deal yet and remains subject to certain conditions.

“The Pre-Listing Restructuring, Cell C Listing and Sell-Down are expected to deliver significant benefits for Blue Label Telecoms (BLT), its shareholders and Cell C,” the company said.

“Should the Pre-Listing Restructuring be implemented, it will facilitate a separation of Cell C and the potential Cell C Listing, allowing investors to independently assess the value and strategic focus of each business.”

“From a BLT perspective, the Cell C Listing, together with the benefits to be derived from Cell C’s turnaround strategy and its improved sustainability, is expected to enhance the value of Cell C and, in turn, restore its shareholder value.”

The company said this unbundling and listing would also have significant benefits for Blue Label, as it will provide Cell C with access to capital markets on an independent basis.

“Under the new leadership of the Cell C executive management team, Cell C has transformed its business model and is well-positioned for the next phase of its development,” Blue Label said. 

“BLT continues to believe in the strong investment case of Cell C, and furthermore, the potential Cell C Listing and separation of BLT and Cell C are aimed at ensuring the future success of both businesses.”

It should be noted that, after the pre-listing restructuring, Blue Label will still own a significant majority of Cell C shares through TPC, although this stake will decline through the sell-down.

The sell-down will see TPC sell its Cell C shares to qualifying investors after implementing the pre-listing restructuring until its shareholding is 26% or above.

Issued on Daily Investor by Blanke Neethling | https://dailyinvestor.com/telecommunications/100035/cell-c-prepares-for-jse-listing/