Blue Label Telecoms announces restructuring of Cell C ahead of potential JSE listing

JSE-listed Blue Label Telecoms, soon to be renamed Blu Label Unlimited (BLT), on Monday announced a restructuring of Cell C ahead of a potential listing of the mobile phone operator.

In an announcement to its shareholders, BLT said the pre-listing restructuring will involve various transactions to optimise Cell C’s capital structure and balance sheet, in preparation for a separation from BLT and a listing on the JSE.

Cell C has a strong market presence in South Africa and has seen strengthened management over the past 24 months, successfully returning it to a strong growth trajectory with significant improvements in operations and financial metrics.

Cell C operates on a capital-light approach to its mobile network, using its own spectrum assets with the physical infrastructure owned by other mobile network operators.

Cell C’s net asset value, as described in the pre-listing restructuring proposal, was R8.31 billion as at May 31, 2025, while its operating profit attributable to Cell C was about R1.6 billion for the year to May 31. These values provide a glimmer of what Cell C’s value might be on the JSE if it lists.

The pre-listing restructuring includes the conversion of various claims totalling R3.68bn held by The Prepaid Company (TPC) against Cell C into Cell C's equity structure.

Currently, BLT owns 100% of TPC, which in turn owns 100% of CEC and 49.5% of Cell C. CEC, or Comm Equipment Company, is responsible for Cell C’s postpaid offerings, and its internalisation through the restructuring will enable Cell C to assume full responsibility for its postpaid customer base.

The restructuring will include the transfer of 100% of the shares in CEC to Cell C in exchange for Cell C equity shares; the exchange will occur at a price of R2.15bn.

The restructuring  transactions also include the transfer of airtime with a sales value of between R7.3bn and R7.5bn from TPC to Cell C in exchange for Cell C shares.

TPC will also acquire the shares in Cell C held by SPV4 and SPV5, these SPV's relate to historical financing arrangements, in settlement of the debt obligations of those to TPC.

BLT will also ensure that Cell C management had incentive structures in place as part of a listing. The listing proposal remains subject to shareholder, regulatory, and other approvals.

BLT Joint-CEO Mark Levy has said previously that apart from other benefits for both groups, such as giving Cell C access to broader capital markets, the listing effectively allows Cell C to repay what it owes BLT. Cell C had defaulted on loans in 2020, and BLT injected funds into the operator to get it back on its feet.

BUSINESS REPORT