Blue Label Telecoms, Cell C’s largest shareholder, has announced a significant restructuring of the mobile operator ahead of a potential listing on the JSE in 2026. This move, which is still subject to market conditions and regulatory approval, is designed to optimize Cell C’s capital structure and balance sheet, setting the stage for its eventual separation and listing as Cell C ListCo.
The comprehensive pre-listing restructuring will include a series of key transactions:
- Debt-to-Equity Conversion: Blue Label’s subsidiary, The Prepaid Company (TPC), will convert R3.7 billion in claims against Cell C into equity in the company.
- Asset Transfer: TPC will transfer 100% of its shares in Comm Equipment Company to Cell C in exchange for R2.15 billion in Cell C equity.
- Airtime Exchange: TPC will transfer airtime with a sales value of approximately R7.3 to R7.5 billion to Cell C in return for Cell C equity.
- Debt Settlement: TPC will acquire the shares in Cell C held by Special Purpose Vehicles (SPVs) 4 and 5 to settle the debt obligations of those entities to TPC.
- “Flip-Up” Transaction: In a process known as a “flip-up,” current Cell C shareholders will exchange their shares for shares in the new Cell C ListCo, the entity intended for the public listing.
Blue Label also confirmed that Cell C’s executive management team will receive an appropriate incentive structure as part of the listing preparations.
The restructuring, which will be finalized just before the potential listing, is aimed at achieving two primary goals:
- Access to Capital Markets: The listing will provide Cell C with independent access to capital markets, which it can use to fund future growth, acquisitions, or investments.
- Brand Elevation: A listing on the JSE is expected to significantly elevate the Cell C brand.
Blue Label emphasized its continued confidence in Cell C, stating that the company has successfully transformed its business model under new leadership and is now well-positioned for its next phase of development. The company believes that separating the two businesses through the listing will ensure the future success of both Blue Label and Cell C.
Additionally, as part of the proposed restructuring, the Cell C management team will be granted a 4.5% stake in Cell C ListCo for no consideration, subject to certain conditions. Blue Label plans to distribute a circular with more details on the restructuring and a notice for a general meeting where shareholders will be asked to approve the plan.
