By Nqobile Dludla
JOHANNESBURG (Reuters) -South Africa’s fourth-largest mobile operator Cell C plans to list on the Johannesburg Stock Exchange, it said on Wednesday, in a move its CEO said would streamline the company’s balance sheet and boost its growth prospects.
Cell C is majority owned by Blue Label Unlimited, which has a 53.57% stake in the mobile operator through its subsidiary The Prepaid Company (TPC).
Together with the listing, TPC plans to offer Cell C shares it owns to select investors in a private placement to raise about 7.7 billion rand ($445 million), including an overallotment option of about 500 million rand and an allocation of up to 2.4 billion to a Black Economic Empowerment vehicle, Cell C said in a statement.
Proceeds will be used by TPC to settle debt, pay dividends and fund working capital. Cell C will not receive any proceeds from the sale, it added.
To help the process, Cell C will be separated from Blue Label in a restructuring ahead of the listing.
“While Cell C is already owned by a listed entity … the separate listing of the company will enable the group to streamline its balance sheet, reinforce its growth strategy and strengthen its competitive positioning,” Cell C’s CEO Jorge Mendes said.
Having struggled with heavy debts, Cell C underwent two recapitalisations and a turnaround drive that included a big reduction in capital expenditure as it moved away from owning extensive infrastructure to an asset-light model.
($1 = 17.3125 rand)
(Reporting by Nqobile Dludla. Editing by Clarence Fernandez and Mark Potter)
