Major restructuring hitting Cell C
Blue Label Telecoms (Blu Label Unlimited) has entered into a binding implementation agreement relating to the pre-listing restructuring of Cell C.
Blu Label previously announced that it was looking to list Cell C on the JSE following a troubled period of ownership.
The company said that the listing will help show the strengths of both entities, with investors allowed to own a direct stake in Cell C.
As is typically the case with any Blu Label and Cell C arrangement, the transaction details are relatively complex.
The pre-listing restructuring aims to optimise Cell C’s capital structure and balance sheet ahead of its listing on the JSE. The pre-listing restructuring includes the following key elements:
- The conversion of various claims totalling R3.7 billion held by The Prepaid Company (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 R2.15 billion;
- The transfer of airtime with a sales value of between R7.3 billion and R7.5 billion 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; and
- The Cell C ListCo Flip-Up, where Cell C shareholders will exchange their Cell C shares for Cell C ListCo shares in preparation for the future listing of Cell C ListCo.
Why the change
Blu Label said that it will also ensure that the Cell C management team have an appropriate management incentive structure in place as per the listing preparation.
The group said that the pre-listing restructuring, Cell C listing, and sell-down are expected to benefit BLT, its shareholders, and cell C significantly.
The group said that following the implementation of the pre-listing restructuring, Cell C will be structured efficiently to facilitate the Cell C listing.
From Blu Label’s perspective, the Cell C listing is expected to enhance its value and, in turn, restore its shareholder value.
The group said that Cell C will have independent access to capital markets, which it may use to support further growth and finance acquisitions or investments.
Cell C is also undergoing a massive change and has adopted a capital-light structure. While it still owns spectrum, the group roams off MTN’s network as an MVNO.
Cell C is the service provider for several other MVNOs, including the rapidly growing Capitec Connect, which is adding over 100,000 customers per month.
The net asset value of Cell C is R8.3 billion as of 31 May 2025, with its operating profits attributable to Cell C being R1.6 billion.
Despite this, the group’s latest financials showed it was technically insolvent, with negative equity of R1 billion.
However, shareholders have been advised that the announcement does not constitute an intention to float announcement, i.e. that Blue Label will be proceeding with the Cell C listing.
The Cell C listing remains subject to market conditions, as well as shareholder, regulatory and other relevant approvals.
The pre-listing restructuring is subject to the fulfilment or waiver of suspensive conditions typical for a transaction of this nature.
It is planned that the pre-listing restructuring will be implemented shortly before Cell C’s listing, if it proceeds.
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