Blue Label Telecoms has said it may list mobile operator Cell C on the JSE as part of a broader restructuring of the group aimed at unlocking shareholder value. The shares surged.

In a statement to shareholders on Friday, JSE-listed Blue Label said that should the listing of Cell C go ahead, it would be on the main board of the Johannesburg bourse.

The proposed restructuring of Blue Label will “assist in facilitating a separation and potential future listing of Cell C”, it said.

“The proposed restructure is expected to encompass various ancillary transactions, aimed at optimising Cell C’s capital structure and balance sheet in preparation for a potential separation and future listing on the JSE. Should Blue Label elect to implement the proposed restructure, it is envisaged that the various restructuring steps will be inter-conditional and contingent upon the potential listing of Cell C,” it added.

The restructuring, including the listing of Cell C, will be subject to approval by the boards of both Blue Label and Cell C and will require shareholder and regulatory consents as well as favourable market conditions.

A separate listing of Cell C will provide investors with the ability to assess the value and strategic focus of the two companies independently, Blue Label said.

Components

Other components of a proposed restructuring include:

Airtime asset transfer: The Prepaid Company (TPC), a wholly owned subsidiary of Blue Label that holds shares and debt claims in Cell C, will transfer Cell C airtime currently held by TPC on its balance sheet to Cell C in exchange for newly issued additional equity in Cell C.
Debt-to-equity conversion: TPC’s outstanding debt claims against Cell C will be capitalised and converted into equity, further reducing Cell C’s leverage.
Acquisition of Comm Equipment Company (CEC): Cell C will acquire 100% of CEC (a wholly owned subsidiary of Blue Label) from TPC in exchange for additional Cell C shares. CEC is a subsidiary responsible for Cell C’s postpaid offerings. “The internalisation will enable Cell C to assume full responsibility over its post-paid customer base, including oversight of supply chain, commercial operations, marketing, billing, credit and collections.”
SPV restructure: The special purpose vehicles (SPVs) currently holding equity interests in Cell C will also be restructured as part of the broader initiative, aligning their ownership structures with the redefined capital framework.

“Overall, the restructure is intended to streamline operations, improve financial sustainability and enhance Cell C’s strategic readiness for long-term growth and potential listing,” Blue Label said.