Cell C to list on JSE in major restructuring move

Cell C is majority owned by Blue Label Unlimited, which has a 53.57% stake in the mobile operator through its subsidiary The Prepaid Company (TPC).

Together with the listing, TPC plans to offer Cell C shares it owns to select investors in a private placement to raise about R7.7bn ($445m), including an overallotment option of about R500m and an allocation of up to R2.4bn to a Black Economic Empowerment vehicle, Cell C said in a statement.

Proceeds will be used by TPC to settle debt, pay dividends and fund working capital. Cell C will not receive any proceeds from the sale, it added.

To help the process, Cell C will be separated from Blue Label in a restructuring ahead of the listing.

"While Cell C is already owned by a listed entity ... the separate listing of the company will enable the group to streamline its balance sheet, reinforce its growth strategy and strengthen its competitive positioning," Cell C's CEO Jorge Mendes said.

Having struggled with heavy debts, Cell C underwent two recapitalisations and a turnaround drive that included a big reduction in capital expenditure as it moved away from owning extensive infrastructure to an asset-light model.