As Cell C listed on the JSE this morning, almost 4 000 shares traded within minutes of the market opening, with the stock debuting at R27 – a 50c per share improvement on the final pre-listing price offer as of last Friday.
In a packed auditorium at the JSE in Sandton, Cell C CEO Jorge Mendes blew the kudu horn, which symbolises unity, strength and renewal. It is a ceremonious event that takes place to mark milestones, such as the listing of a new company on the exchange.
“We put the C in the JSE,” says Mendes. The company, which dates its existence back to 2001, now appears on the board under the share code CCD.
Mendes, addressing the audience in the packed JSE lobby, admitted to “big feelings”, noting that this process had been “24 years in the making… So, it’s been a journey. It’s been incredible.”
This is the fifth initial public offering (IPO) on the bourse this year.
Cell C’s debut on the main board this morning under the telecoms services sector sees it joining peers such as MTN, Telkom and Vodacom – a milestone that comes about a decade after the mobile operator first considered such a move.
A new beginning
“Telecommunications is central to economic participation and digital inclusion, and we look forward to providing a fair, well-regulated platform as Cell C engages with public-market investors,” says JSE Group CEO Leila Fourie.
Commenting on a telecoms market worth R150 billion, Fourie says: “Connectivity is no longer a luxury. It’s a lifeline and an opportunity, and Cell C has been at the forefront of making that possible.”
With the pre-listing offer having closed last Friday, its stock had already been discounted by around 10%, giving it a market capitalisation of R9 billion.
Blue Label Telecoms, as it was then known, started buying out Cell C in 2017 and subsequently received all regulatory approvals to reach a majority stake in September, before starting the process to list the operator this month.
Having rebranded as Blu Label Unlimited, or BLU, it released Cell C’s pre-listing statement just more than two weeks ago, indicating that shares would go on sale for between R29.50 and R35.50, making it worth as much as R12 billion.
Mike Gresty, Anchor fund manager, says BLU may not have got the price it hoped for in the IPO, but its balance sheet also emerges meaningfully stronger thanks to the proceeds it receives.
Gresty notes that the fact that the price had to be lowered to attract the required investor interest suggests that a plurality of investors is yet to be convinced about the Cell C investment case.
Peter Takaendesa, chief investment officer at Mergence Investment Managers, tells ITWeb the discount indicated there were pre-market concerns surrounding the business, or even the sector.
“There are still many moving parts, so it is likely to take some time for the market to get confidence on what is sustainable for Cell C.”
BLU spin-out and Cell C’s transformation
“The separate listing allows Cell C to streamline its balance sheet, reinforce its growth strategy and unlock long-term value,” says Cell C CFO El Kope. “The business today is fundamentally stronger and more competitive than it was two years ago.”
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. The company has said it targets paying between 30% and 50% of free cash flow to investors as dividends.
BLU will still hold a majority stake in Cell C but is now able to concentrate on its restructured business. Having recently rebranded, BLU can now use its new brand to clarify operations for investors and resolve market confusion, aiming to “showcase” the full ecosystem through seven integrated ‘buckets of solutions’ combining physical, virtual and digital capabilities.
BLU has said that revenue will come in at low- to mid-single digits in the near-term, before growing to mid-single digits in the medium-term.
“If Cell C can deliver strong results over the next 12 to 18 months, then BLU can do a bookbuild in the market to sell some of its Cell C shares at the right time,” Takaendesa notes.
Leaner operating model
Cell C, with around seven million subscribers, operates on a capex-light model, with roaming agreements with MTN and Vodacom. It recently disclosed pro forma numbers showing R3.5 billion in net profit from R13.7 billion in revenue – the first time it has been profitable in its existence.
“This successful listing confirms our belief that a leaner, more agile operating model can compete effectively, while keeping connectivity affordable for all South Africans. We’ve shown that purpose and profitability can co-exist and win,” says Mendes.
Gresty tells ITWeb that the company’s financial position could remain complicated in the short-term due to the complexity of the pre-listing process.
“I think investors remain uneasy about the reliance Cell C has on contracts to purchase capacity from MTN and Vodacom. Many have likely chosen to watch from the sidelines to see if the management team is able to deliver on the promises it has made for the future,” says Gresty.
However, Gresty adds: “Cell C as it is emerging now is not the same as it was in the past.” Having listed as a distinct entity from BLU, Cell C is now free to “chart its own course”.
BLU’s turbulent time
Today’s listing marks the end of a difficult chapter for BLU, whose co-CEOs Brett and Mark Levy were all smiles ahead of the ceremony.
BLU initially invested in Cell C for R5.5 billion in 2017 and subsequently wrote its stake down to zero. It then helped rescue Cell C through a R1 billion injection following Cell C’s 2020 default on loans worth around R7.3 billion.
As of May 2025, BLU’s exposure to the operator was R3.1 billion, against which it has made provision for loss allowances.
At the end of August, Mark Levy admitted to execution missteps with Cell C, while telling ITWeb it bought the stake for all the right reasons given its key spectrum asset.
“Cell C would not have been in a position to list without BLU’s support in reshaping the balance sheet,” says Takaendesa.
Takaendesa also congratulated BLU “for finally managing to IPO and get some cash out of Cell C. It has been a very difficult investment for them. This will allow them to repay their own debt and, hopefully, the current Cell C CEO can keep it listed over the coming decade.”
A decade in the making
ITWeb’s research indicates that a potential listing of Cell C has been on the cards for about a decade.
Then-CEO Jose Dos Santos said in early 2016 the telco would use the next three years to position itself for a favourable listing, later hinting at an IPO in late 2019 or early 2020. Listing the company, he said at the time, would put it on a more solid financial footing.
In Cell C’s formative years, it was owned by 3C Telecommunications, which was 60% owned by Oger Telecom South Africa – a division of Saudi Oger – and 40% by empowerment partner CellSAf. That empowerment partnership has repeatedly been diluted through various restructuring moves to the point where it no longer meets the threshold of an empowerment partnership.
CellSAf recently challenged the Independent Communications Authority of South Africa’s approval of an ownership change in 2024 – one of the regulatory approvals that paved the way for BLU to become its majority shareholder.
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