Cell C’s JSE listing plans take shape after major Blue Label restructuring
Key topics:
Blue Label restructures Cell C debt ahead of potential JSE listing
Prepaid Company converts multi-billion claims into Cell C equity shares
Cell C shows profit but remains technically insolvent despite recovery
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Blue Label Telecoms has detailed a massive restructuring of its underlying businesses to clean up Cell C’s balance sheet ahead of a possible listing on the Johannesburg Stock Exchange (JSE).
For several months, Blue Label told investors it was exploring various strategic initiatives to unlock shareholder value, including listing Cell C separately on the JSE and increasing transparency with investors.
On Monday, 1 September 2025, it announced that it had entered into a binding implementation agreement relating to the pre-listing restructuring.
“The Pre-Listing Restructuring encompasses various transactions aimed at optimising Cell C’s capital structure and balance sheet in preparation for a separation and listing of the business on the JSE,” Blue Label stated.
Blue Label said the pre-listing restructuring includes the following key elements:
The conversion of various claims totalling R3,676,852,511 held by The Prepaid Company (TPC) against Cell C into Cell C equity shares.
The transfer of 100% of the shares in Comms Equipment Company (CEC) by TPC to Cell C in exchange for Cell C equity shares, at R2.15 billion.
The transfer of airtime with a sales value of R7.3 billion–R7.5 billion, including VAT, 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.
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.
Blue Label established several special purpose vehicles (SPVs) during Cell C’s past recapitalisations in 2017 and 2022. SPV4 and SP5 were created as part of the latter recapitalisation transaction.
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The shares in SPV4 are held by Albanta Trading 109 Proprietary Limited, a subsidiary of the Believe Trust, which Cell C established for the benefit of its employees.
SPV5 assumed Cell C’s debt obligations to Dark Fibre Africa (DFA) and was allocated shares in Cell C as collateral.
Blue Label said it would ensure that the Cell C management team has an appropriate management incentivisation structure in place as part of the Cell C Listing preparation.
It emphasised that the announcement does not constitute an “Intention to Float” notice. In other words, Blue Label has not announced that it would be proceeding with the Cell C Listing.
“The Cell C Listing remains subject to, amongst other things, market conditions, shareholder, regulatory and other relevant approvals,” it said.
Blue Label said 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 the Cell C Listing, if it proceeds,” said Blue Label.
“The pre-listing restructuring, Cell C listing, and sell-down are expected to deliver significant benefits for Blue Label Telecoms, its shareholders and Cell C.”
The Sell-Down is one of the last steps in the transaction where Blue Label said it expects to offer for sale, through The Prepaid Company, sell-down shares to qualifying investors following the restructuring.
“The sale of the Sell-Down shares by TPC shall occur simultaneously with the Listing. It is not possible at this stage to specify what the number of Sell-Down shares or offer price will be,” it said.
“TPC will dispose of sufficient Sell-Down shares such that its final shareholding in Cell C ListCo post the Pre-Listing Restructuring and Sell-Down will be not less than 26%.”
Blue Label said a range for the offer price will be specified in the pre-listing statement.
“Given that the Pre-Listing Restructuring will be implemented based on the offer price, the number of Sell-Down shares cannot be determined at this stage,” it said.
A listing 10 years in the making
Blue Label has had plans to list Cell C since 2016, when former Cell C CEO Jose dos Santos said the company planned to list on the JSE in the next three to four years.
Dos Santos said in January 2016 that following the company’s recapitalisation, the following three years would be used to position it strongly for a favourable listing.
A month after Dos Santos made these remarks, Blue Label co-CEO Brett Levy said that listing Cell C was a good strategy. Levy said all big operators should list due to their liquidity on the market and their profile.
He said that a restructured Cell C offers compelling growth prospects, including listing three to four years down the line, sometime in 2019 or 2020.
However, this planned listing did not happen as the first recapitalisation did not improve Cell C’s financial situation enough to stabilise the company.
Blue Label had to orchestrate a second recapitalisation to further reduce Cell C’s debt in an attempt to turn the company around.
Last week, Cell C announced that it reached profitability in the year ended 31 May 2025, achieved growth across key revenue lines, and improved operating margins compared with the prior year.
Blue Label Telecoms also reversed its impairment of Cell C and started recognising its share of the mobile operator’s profits and losses. However, Cell C remains technically insolvent.
Blue Label stopped recognising Cell C’s share of profits and losses in 2019 after impairing its investment in the mobile operator to nil.
The impairment came after Blue Label took significant pain following its acquisition of Cell C, including the operator reporting an R8 billion loss in the financial year ended 31 May 2019.
Blue Label acquired a 45% stake in Cell C in 2017 as part of a deal to recapitalise the company when it was buckling under the weight of huge foreign-currency loans.
Following a second recapitalisation in 2022 and several additional transactions in recent years, Blue Label’s economic interest in Cell C now stands at 70% as of 31 May 2025.
Blue Label explained in previous years that it would resume recognising Cell C’s share of profits only after its share of the profits equals the share of accumulated losses not recognised. This has now happened.
However, in its financial statements for the year ended 31 May 2025, Blue Label reported that Cell C had assets worth R15 billion, while its liabilities were close to R16.1 billion.
This represents a substantial improvement in Cell C’s negative equity position since last year, when it stood close to R3.2 billion.
The table below summarises Cell C’s financial statements as reported in Blue Label’s latest annual results.
This article was first published by MyBroadband and is republished with permission