Cell C, South Africa’s fourth largest mobile operator, says its planned listing on the JSE will help the company get out of most of its R14 billion debt and increase its profile and credibility.
This was the word from CEO Jorge Mendes and CFO El Kope, speaking yesterday during a panel discussion at the Conext Conference organised by the Digital Council Africa.
In May, Blue Label Telecoms announced it is exploring a JSE debut for Cell C as part of a broader restructuring plan.
At the time, it issued a cautionary statement, announcing it is considering various strategic options and initiatives to unlock and deliver value to its shareholders.
Blue Label, Cell C’s largest shareholder with a 49.5% non-controlling stake, is seeking to secure full control by acquiring an additional 4.04% via its subsidiary, The Prepaid Company.
According to Kope, once listed, Cell C will be in a better position to raise additional capital and bolster its ability to manage and repay the bulk of its debt.
“At the end of May 2025, Cell C was R14 billion in debt – entries and all debt inclusive, including shareholder debt. Listing will help the company get out of the bulk of its interest-bearing debt with the shareholders,” she explained.
“The normal operational debt will still be maintained and the only debt we will have will be for the facilities that we hold because it's revenue-generating debt. At the end of May, we made R30 million in cash flow, and what we did with that was pay off historical debt.
“In a listed environment, you can take that and re-invest it. We can do smarter things like invest in how we connect our customers, and how we service them. So listing will give us a completely different footing on how we compete, compared to how we do it now.”
Most of Cell C's debt stems from a period of financial strain and restructuring, involving debt from its lenders. The restructuring process also created significant internal debt, including large shareholder loans from Blue Label Telecoms, and lease obligations.
Preparing for listing
Kope added the company has been hard at work, preparing for the listing, and holding engagements in the background.
“From a business readiness perspective, I would say the business is ready, it's just now about making sure that potential investors understand what we bring to the table and then appreciate it so that they can put value on it. At the moment, we are busy making sure that everyone knows what we know about ourselves,” Kope continued.
According to Mendes, companies operating in a listed environment are strongly governed and regulated – something Cell C has already being accustomed to due to being controlled by a listed firm.
“Cell C is owned by a listed company and has been operating as a listed entity. But what listing does is that it allows Cell C to clean up its balance sheet and when the company starts doing stuff in the front foot as opposed to being in the background, it will help Cell C prepare for the headwinds in the market.
“Listing will put Cell C in a fundamentally different position from where it was two years ago. So it's important to understand what it does from a value unlock point of view. Buying back CEC, the post-paid business, remains in the pipeline. When you clear out your balance sheet, it will allow you to be in a position to do great things,” Mendes explained.
According to Mendes, Cell C has a capex of around R652.8 million and the company wants to make sure that this is customer-focused capex.
“We've built a new app, we've opened 59 stores, we've replaced the prepaid billing system, we've revamped our USSD channels and our platforms for personalisation and these are all the stuff that will add value to the business.
“So what we've also done is offer consumers and investors a lot more transparency and given them an opportunity to know what's happening at Cell C – and to engage directly with Cell C, not via Blue Label,” he added.
Cell C has also built a good team of employees and a strong exco team, having made 107 appointments in the last two years, he pointed out.
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