Blu Label Unlimited Group could pay a special dividend to its shareholders should it be successful in its planned listing of Cell C on the JSE next year.

The company, which is in the process of taking control of Cell C, has given itself until the end of April 2026 to bring the mobile operator to market, giving it leeway to pick the right moment to maximise the success of the planned listing.

The flexible window, disclosed on Monday in a circular to shareholders, means management is under no pressure to list into weak market sentiment.

Instead, Blu Label can hold off until equity markets improve, investor appetite for telecommunications stabilises or Cell C posts firmer operating results from its turnaround.

In theory, by waiting, it can showcase stronger gains from Cell C’s mobile virtual network operator business, further debt reduction and subscriber growth.

The Cell C listing – if it happens – will mark a significant step forward in the long and troubled history of South Africa’s third mobile operator.

Founded in 2001 to take on Vodacom and MTN, Cell C has endured repeated crises, from mounting debts to unsustainable capital expenditure on its own network as it tried to compete head-on against its more established and deep-pocketed rivals.

Successive recapitalisations – including a 2017 restructuring and the more comprehensive 2022 recap backed by Blu Label (then Blue Label Telecoms) – were needed to keep the company afloat.

Asset-light model

In the years since, Cell C has shifted to a more asset-light model, leaning on roaming agreements with larger rivals to cut back on network investment.

Under CEO Jorge Mendes, the company has pushed through a turnaround strategy that has seen it stabilise operations, grow its wholesale and MVNO businesses, and return to profitability. Blu Label, which has repeatedly had to impair the value of its Cell C investment, has now reversed those impairments – a clear signal that it believes Cell C is on a firmer footing.

Read: MVNOs at heart of Cell C reboot

A successful separation will give Cell C direct access to capital markets to fund growth, while allowing investors to assess its value independently of Blu Label. According to Monday’s circular, a central plank of the proposed restructuring is a major sell-down of Blu Label’s stake in Cell C.

The Prepaid Company (TPC), a Blu Label subsidiary, will place a large portion of its Cell C holding with institutional investors at the time of the proposed listing.

The anticipated proceeds are estimated at about R9-billion, of which roughly R6-billion will be used to settle debt, with the remaining money retained within Blu Label for working capital – and the potential dividend to shareholders. – © 2025 NewsCentral Media

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