Shareholders of Blue Label Telecoms will vote on whether to proceed with the listing of SA’s fourth largest mobile operator, Cell C, on October 20.
This is according to a circular that the prepaid specialist company published late on Monday, detailing the rationale for the transaction, the financial health of Cell C, steps that have been taking to prepare the company for listing and information on how shareholders can participate in the vote.
In May, Blue Label announced plans to spin off Cell C as part of the group’s restructuring, in a move that would result in all four of SA’s largest telecom companies being listed on the local bourse.
At the beginning of September, the group said it had entered into a binding implementation agreement relating to the prelisting restructuring, which encompasses various transactions aimed at optimising Cell C’s capital structure and balance sheet in preparation for a separation and listing of the Cell C ListCo business.
The various parties are seeking to implement a structure to facilitate a separation and potential listing of a newly incorporated holding company of Cell C on the JSE’s main board.
In essence, Blue Label is converting more than R13bn worth of Cell C into equity.
Until recently, Blue Label held a direct shareholding of 49.53% of the voting rights in Cell C. However, through additional transactions, including the acquisition of shares from other special purpose vehicles (SPVs) that had debt obligations to TPC, Blue Label has an effective economic interest of 70% in Cell C.
Earlier this month, the Competition Tribunal approved Blue Label’s bid to take control of Cell C, receiving conditional approval to acquire an additional 4.04% shareholding in the mobile provider from Cedar Cellular Investments 1. This pushes up Blue Label’s stake, held through its subsidiary The Prepaid Company (TPC) to 53.57%.
The effect of the prelisting transactions would take the economic interest to 93%. Having received approval from the tribunal, that economic interest becomes voting control.
Competition authorities have also given the green light for Cell C to acquire Comm Equipment Company (CEC), a company specialising in services for contract customers, from Blue Label Telecoms.
According to a new investor presentation, the combined Cell C/CEC business made R13.7bn in revenue for the year ended May, with Cell C contributing R11.1bn and CEC R2.8bn. The group’s earnings before interest and tax amounted to R2.37bn.
Cell C has long harboured ambitions of going public — a plan first floated by former CEO Jose Dos Santos in 2018. However, this plan came to naught as the company struggled to make a profit — making its initial public offering a challenging prospect for investors.
Correction: September 25 2025
A previous version of this article referenced Cell C reporting revenue of R137bn in the year to May 2025. The correct figure is R13.7bn.
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