Cell C is on track to debut on the JSE – which ITWeb understands will be next Thursday – as planned, despite a legal challenge of a 2024 approval of a change in majority ownership.
The network operator’s former empowerment partner, CellSAf, wants the High Court to review the Independent Communications Authority of South Africa’s (ICASA’s) 2024 decision to transfer control of Cell C to Blu Label Unlimited’ s subsidiary, The Prepaid Company (TPC).
Blu Label Unlimited – previously known as Blue Label Telecoms – confirmed to ITWeb that it is aware of the legal challenge.
“In any event, the application has nothing to do with the listing and does not affect the listing process. The application certainly includes no interdict application – whether urgent or otherwise,” the company says.
The regulatory approval for the change in control was part of a process through which Blu Label Unlimited – or BLU – increased its stake in Cell C, which it did via its TPC subsidiary.
BLU says: “Our legal advisers are very clear that the challenge, if it is ever formally brought, has no merit.” The company adds that this matter has been disclosed in Cell C’s pre-listing statement.
“The listing remains on track and preparations continue as planned,” says BLU.
Several challenges
This is not the first time CellSAf has opposed the tie-up. On 19 September last year, in a presentation to ICASA, it asked that the authority refuse to grant permission for the deal.
CellSAf’s presentation indicated that Cell C’s ownership scheme was not broad-based and didn’t meet the requirements of 30% ownership. ICASA requires a company to be at least 30% owned by historically disadvantaged people.
By that stage, CellSAf’s equity stake had been diluted to below the threshold of an empowerment partnership, ITWeb’s research shows.
CellSAf was one of Cell C’s original investors in 2001 when the operator launched, with a 40% stake in 3C Telecommunications, Cell C’s holding company.
Four years later, the empowerment partner sold a 15% portion of this stake to settle its funding debt, which reduced its share to a 25% debt-free and unencumbered stake.
The empowerment company has subsequently seen its stake slowly diminish over time as the mobile operator went through various restructuring processes, notably in 2017 and 2022.
In 2017, CellSAf said in a statement that restructuring Cell C back then was “far from a done deal”, alleging it “amounts to a blatant attempt at corporate capture, and is likely to collapse under regulatory scrutiny”.
ITWeb was unable to locate contact details for CellSAf to request comment.
Ownership hurdle
BLU was finally successful in achieving its almost decade-long goal of securing a majority stake in Cell C in September 2025, when it reached 53.57% ownership. The final approval from the Competition Tribunal finalised several regulatory hurdles around the buyout.
Having bought out South Africa’s capex-light mobile operator, BLU is now set to list Cell C, which ITWeb understands will happen next Thursday, assuming all regulatory processes go smoothly.
The operator could be worth as much as R12 billion when it debuts based on BLU’s indication that the stock will be put on sale at between R29.50 and R35.50.
Listing Cell C will enable the operator to pay its debt off to BLU, enter into a R2.4 billion empowerment deal, and potentially pay dividends as early as the end of the 2027 financial year.
After navigating a complex debt restructuring following a 2020 default on loans worth around R7.3 billion, BLU invested more than R1 billion in Cell C, with much of the remaining debt restructured.
As of May 2025, its exposure to the operator is R3.1 billion, against which it has made provision for loss allowances. BLU initially invested in Cell C for R5.5 billion in 2017 and had to subsequently write its stake down to zero.
This year, the mobile operator returned to profitability, reversing over two decades of losses since its 2001 launch.
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