Cell C has officially ended its run as a private company, listing publicly on the JSE and running as an independent after almost a decade under Blu Label\u2019s ownership.\u00a0<\/p>\n\n\n\n
In August 2017, Blu Label, through its subsidiary, The Prepaid Company, acquired 45% of the issued share capital of Cell C Limited for R5.5 billion. <\/p>\n\n\n\n
However, the company ended up being a significant drag on the group’s finances, and by May 2019, the investment in Cell C was impaired to Rnil. <\/p>\n\n\n\n
Cell C remained technically insolvent for most of its time under Blu Label.<\/p>\n\n\n\n
Despite these struggles, Blu Label would later increase its stake in the company to 53%, giving it a majority share in the company, and launch a massive and complex restructuring of the group.<\/p>\n\n\n\n
Under the restructuring, Cell C sold its infrastructure and moved onto MTN\u2019s network, while also forging roaming agreements with Vodacom.<\/p>\n\n\n\n
With this arrangement, MTN operates a \u201cvirtual radio access network\u201d allowing Cell C to offer services using its own spectrum, while the deal with Vodacom is a more traditional roaming arrangement.<\/p>\n\n\n\n
Without its own physical network to maintain\u2014and pump billions of rands into\u2014Cell C was able to focus on services and network quality, which have improved significantly over the years.<\/p>\n\n\n\n
To address the financial troubles, Blu Label announced that it would list Cell C on the JSE in an IPO.\u00a0<\/p>\n\n\n\n
Through the listing of Cell C, Blu Label is looking to generate R6.5 billion from the sale of shares, including an overallotment of R338 million.<\/p>\n\n\n\n
The proceeds from the listing will be used to settle certain interest-bearing borrowing and other debt obligations. <\/p>\n\n\n\n
Blu Label initially eyed an offer price between R29.50 and R35.50 per share, which implied a market cap of between R10 billion and R12 billion for Cell C.<\/p>\n\n\n\n
By Friday, 21 November, Cell C informed the market that it had to reduce this offer price to R26.50 per share, implying a market cap of R9 billion. <\/p>\n\n\n\n
The stock has now officially been listed on the JSE, rising to R27.30 by 09h45, giving the telecommunications company a market value of R9.3 billion.<\/p>\n\n\n\n
While the share prices has ticked higher than the offer, it has not reached initial expectations and has been seen by the market as a more muted IPO.<\/p>\n\n\n\n
The company expects growth across its prepaid, postpaid, enterprise and wholesale channels, supported by its fast-expanding network of retail stores and mobile virtual network operator (MVNO) partnerships<\/p>\n\n\n\n
This includes offerings from lenders such as Capitec Bank, FNB, and retailer Shoprite.<\/p>\n\n\n\n
\u201cOur JSE listing is more than a financial milestone \u2013 it confirms our belief that a leaner, more agile operating model can compete effectively while keeping connectivity affordable for all South Africans,\u201d said Cell C CEO Jorje Mendes.\u00a0<\/p>\n\n\n\n
\u201cWe\u2019ve shown that purpose and profitability can coexist and win. Cell C is redefining what a telco of the future looks like: agile, capex-light, and partnership-driven.\u201d <\/p>\n\n\n\n
\u201cBy leveraging technology and innovation, we\u2019re building a future-ready platform that delivers real value for customers and investors alike. We are shaping the future of telco.\u201d <\/p>\n\n\n\n
Cell C is now trading as an independent following years of being part of Blu Label\u2019s complex ownership structure.\u00a0Blu Label will remain the mobile operator\u2019s largest shareholder.<\/p>\n\n\n\n
While some investors approached the IPO cautiously, citing the complexity of Cell C\u2019s restructuring, Mendes said the market is taking a \u201cwait-and-see\u201d approach as the company transitions to a clean set of comparable financials over the next 18 to 24 months.<\/p>\n\n\n\n
\u201cThere\u2019s huge value in this asset,\u201d he said. \u201cWe have a clear strategy and a business that will deliver growth. I\u2019m excited to showcase that in the public markets.\u201d<\/p>\n\n\n\n
With reporting from Bloomberg<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Cell C’s muted IPO on the JSE marks a new era for the group following a tumultuous period under the ownership of Blu Label. <\/p>\n","protected":false},"author":95,"featured_media":839349,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[23759,42],"class_list":["post-844745","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-blu-label","tag-cell-c"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/844745","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=844745"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/844745\/revisions"}],"predecessor-version":[{"id":844760,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/844745\/revisions\/844760"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/839349"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=844745"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=844745"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=844745"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}