Plans to list Cell C after major restructuring

Blue Label is considering a huge restructuring of Cell C to unlock value for shareholders, which includes a potential listing of the embattled mobile operator on the JSE.

Blue Label is exploring a potential restructuring of the group, including its subsidiaries and associates, and the possible listing of Cell C on the Prime Segment of the Main Board of the JSE.

Cell C has undergone a significant transformation in recent years amidst extreme struggles for the group, which is technically insolvent as per Blue Label’s latest results.

Cell C is now using a capital-light approach to its mobile network, which uses its spectrum assets in combination with physical network infrastructure owned by other mobile network operators.

Blue Label said that the Cell C executive management team has returned the telco company to a strong, sustainable growth trajectory, with operational and financial improvements.

The company said the proposed restructuring would encompass several ancillary transactions to optimise Cell C’s capital structure and balance sheet in preparation for a listing.

If Blue Label elects to implement the restructuring, it believes that the steps will be inter-conditional and contingent upon Cell C’s potential listing.

It believes the restructuring will benefit the company and its shareholders significantly.

If the restructuring takes place, it will allow investors to independently assess each business’s value and strategic focus.

Blue Label said that key components of the restructuring also include:

• Airtime asset transfer: The Prepaid Company Proprietary Limited (TPC), a wholly owned subsidiary of Blue Label, which holds shares and debt claims in Cell C, will transfer Cell C airtime currently held by TPC on its balance sheet to Cell C in exchange for newly issued additional equity in Cell C.

• Debt-to-equity conversion: TPC’s outstanding debt claims against Cell C will be capitalised and converted into equity, further reducing Cell C’s leverage.

• Acquisition of Comm Equipment Company Proprietary Limited (CEC): Cell C will acquire 100% of CEC (a wholly owned subsidiary of Blue Label) from TPC in exchange for additional Cell C shares. CEC is a subsidiary responsible for Cell C’s postpaid offerings. The internalisation will enable Cell C to assume full responsibility over its postpaid customer base, including supply chain oversight, commercial operations, marketing, billing, credit, and collections.

• SPV restructure: The Special Purpose Vehicles (SPVs) currently holding equity interests in Cell C will also be restructured as part of the broader initiative, aligning their ownership structures with the redefined capital framework.

“Overall, the restructure is intended to streamline operations, improve financial sustainability, and enhance Cell C’s strategic readiness for long-term growth and potential listing,” Blue Label said.

“The internalisation will enable Cell C to assume full responsibility over its postpaid customer base, including oversight of supply chain, commercial operations, marketing, billing, credit, and collections.”