Wrap Text
Category 2 acquisition and further updates regarding the proposed restructure of Blu Label
Blu Label Unlimited Group Limited
(formerly known as "Blue Label Telecoms Limited")
(Incorporated in the Republic of South Africa)
(Registration number: 2006/022679/06)
JSE share code: BLU
ISIN: ZAE000109088
("Blu Label", "BLU" or "the Company")
CATEGORY 2 ACQUISITION AND FURTHER UPDATES REGARDING THE PROPOSED RESTRUCTURE OF BLU LABEL
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE
OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA AND JAPAN OR ANY
OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL
1. INTRODUCTION
Further to Blu Label's announcements released on the Stock Exchange News Service ("SENS") of the JSE
on 16 May 2025, 1 September 2025, 4 September 2025 and 22 September 2025 regarding a potential
restructure of BLU and its subsidiaries ("Group"), Cell C Limited ("Cell C") prepared four presentations on
the Cell C business which were made available on Blu Label's investor relations website on 26 May 2025,
22 September 2025, 6 October 2025 and 20 October 2025.
In addition to these SENS announcements and Cell C presentations, shareholders of BLU ("Shareholders")
are advised of the below updates on various agreements that have been entered into by BLU and Cell C
("Additional Events"):
• Nedbank Transactions
Blu Label and The Prepaid Company Proprietary Limited ("TPC") (a wholly-owned subsidiary of
Blu Label) have reached agreement with Nedbank Limited ("Nedbank") to acquire its loan claim
against Cell C ("Nedbank Claim"). TPC shall acquire the Nedbank Claim at its current face value
of R447 million ("Nedbank Claim Acquisition") and intends to convert the Nedbank Claim to
equity under the same terms as the Debt-to-Equity transactions of the Restructuring
("Restructuring") as outlined in the Blu Label Circular published on 22 September 2025
("Circular"). This shall result in a reduction in Cell C's 2025 Group pro forma gross debt balance
(defined as interest-bearing debt) by the face value of the Nedbank Claim as at 31 May 2025 of
R435 million.
In addition, TPC has agreed to acquire Nedbank's shareholding in Cell C or Cell C Holdings (to
the extent that Nedbank's shares in Cell C have been exchanged for shares in Cell C Holdings
Limited ("Cell C Holdings") as such exchange is contemplated in the Circular and as part of the
Cell C Listco Flip-Up described therein) ("Nedbank Shares"), subject to the terms articulated in
paragraph 4 below ("Nedbank Shares Acquisition"). The Nedbank Claim Acquisition and the
Nedbank Share Acquisition are collectively referred to as the "Nedbank Transactions". The
Nedbank Transactions, aggregated with the Lesaka Transaction (as defined below), constitute a
Category 2 transaction in terms of the JSE Listing Requirements.
• Lesaka Transaction
TPC has reached agreement with Lesaka Technologies Proprietary Limited ("Lesaka") to acquire
Lesaka's shareholding in Cell C or Cell C Holdings (to the extent that Lesaka's shares in Cell C
are exchanged for shares in Cell C Holdings) ("Lesaka Shares") subject to the terms articulated
in paragraph 4 below ("Lesaka Transaction"). The Lesaka Transaction, aggregated with the
Nedbank Transactions, constitutes a Category 2 transaction in terms of the JSE Listing
Requirements.
• Lease Settlement
Cell C has reached agreement with a material lease provider ("Lease Provider") to settle the
existing balances owed to the Lease Provider ("Lease Provider Claims"). The Lease Provider
Claims include the following obligations and face values as at 31 May 2025:
o Obligations under finance leases: R866 million
o Trade and other payables: R450 million
o Total Lease Provider Claims: R1.316 billion
Cell C shall settle all the Lease Provider Claims for a cash amount of R750 million. The cash
required for the settlement of the Lease Provider Claims shall be funded by a Blu Label acquisition
of airtime and subsequent conversion into equity in terms of the airtime transfer undertaken as
part of the Restructuring (as contemplated and included in the airtime valuation in the Circular).
This shall result in a reduction in Cell C's 2025 Group pro forma gross debt balance by the face
value of the obligations under finance leases as at 31 May 2025 of R866 million and of its trade
payables balance by R450 million. In addition, the difference between the face value and
settlement value results in an increase of R565 million in Cell C's 2025 Group pro forma EBITDA
of R3.1 billion presented on page 26 of the Cell C presentation published on 22 September 2025
titled "Pro forma EBITDA underscores improving profitability". The updated 2025 Group pro forma
EBITDA is R3.7 billion. This Additional Event is not categorisable in terms of the JSE Listing
Requirements.
The Additional Events represent further important steps taken by Blu Label and Cell C to ensure that Cell
C has a simplified capital structure which supports a separation and listing of the newly incorporated holding
company of Cell C, namely Cell C Holdings, on the Prime Segment of the Main Board of the Johannesburg
Stock Exchange, the securities exchange operated by the JSE Limited ("JSE") (the "Cell C Listing"). The
acquisition and intended conversion of the Nedbank Claim and the settlement of the Lease Provider Claim
particularly represent positive updates to Cell C's gross debt position, collectively resulting in a R1.301
billion decrease in the R4.051 billion 2025 Group pro forma gross debt presented on page 30 of the Cell C
presentation published on 22 September 2025 titled "Debt evolution to position the business for long-term
growth". The updated 2025 Group pro forma gross debt is R2.750 billion, representing a 2025 Group pro
forma gross debt to EBITDA of 0.8x.
Description Gross debt (R'million)
2025 Group pro forma gross debt (per 22 September 2025 presentation) 4,051
Acquisition and intended conversion into equity of the Nedbank Claim (435)
Settlement of the Lease Provider Claim (866)
Updated 2025 Group pro forma gross debt 2,750
The implementation of the Additional Events will remain subject to the suspensive conditions outlined in
paragraph 6 below. Shareholders are further advised that this announcement does not constitute an
intention to float ("ITF") announcement. Please refer to the presentation published on 5 November 2025
on the Blu Label website with the updated pro forma metrics:
https://www.bluelabeltelecoms.co.za/presentation.php.
2. DESCRIPTION OF BLU, CELL C, NEDBANK AND LESAKA
Overview of BLU
BLU is a leading digital distribution company, seamlessly connecting people with essential products and
services. BLU specialises in prepaid solutions, virtual goods and value-added offerings, making them readily
available to the mass market. Listed on the JSE since 2007, BLU derives its strength from its extensive
distribution network and building long-term partnerships. BLU's proprietary platforms enable mobile
networks, utilities, banks, retailers, petroleum companies and point-of-sale devices to drive consumer-
centricity and speed to market, while ensuring the stability and security of its systems. BLU has an extensive
distribution footprint across South Africa. Mobile networks, utilities, banks, retailers and others leverage
BLU's proprietary platforms for efficient consumer engagement and rapid product launches, all backed by
robust and secure systems.
Overview of Cell C
Cell C is a telecommunications and technology company within the South African market with a highly
recognisable brand and strong market presence. Cell C has a diversified business model across its retail
and wholesale businesses and is the leading enabler of mobile virtual network operators in South Africa.
Cell C has taken a capital-light approach to its mobile network, utilising its own spectrum assets in
combination with physical network infrastructure owned by other mobile network operators. Going forward,
Cell C will leverage the flexibility that comes with its capital-light model and the ability to roam across partner
networks and will invest further to enhance customer offerings and experience.
Over the past 24 months, the strengthened Cell C executive management team has been able to
successfully return the Cell C business to a strong growth trajectory with significant improvement in both
operational and financial metrics, driving the sustainable growth and profitability of Cell C going forward.
Overview of Nedbank
Nedbank Limited is a large financial services group with a presence across the African continent. Nedbank
offers a wide range of wholesale and retail banking solutions, as well as insurance and asset management
offerings through their four frontline business clusters: Nedbank Corporate and Investment Banking,
Nedbank Personal and Private Banking, Nedbank Business and Commercial Banking and Nedbank Africa
Regions. Nedbank has been a long-term funder and shareholder of Cell C.
Overview of Lesaka
Lesaka is a South African fintech company driven by a purpose to provide financial services, software and
other business services to Southern Africa's underserviced consumers and merchants. Lesaka offers an
integrated and holistic multiproduct platform that provides transactional accounts, lending, insurance,
merchant acquiring, cash management, software and Alternative Digital Products. Lesaka has been a long-
term shareholder of Cell C.
3. TRANSACTION RATIONALE
BLU has been considering various strategic options and initiatives to unlock and deliver value to its
Shareholders, including a separation and listing of Cell C Holdings on the JSE. A key element of a
successful Cell C Listing is the simplification of both Cell C's capital and ownership structures.
Currently BLU owns 100% of TPC which, in turn, owns 59.66% of the equity shares in Cell C. Nedbank
currently holds 7.53% and Lesaka holds 5.13% of the equity shares in Cell C. The Restructuring will occur
at a valuation derived from the Cell C listing price to ensure that all Cell C's existing and new shareholders
through the Cell C Listing are treated equally. Post the implementation of the Restructuring, it is expected
that BLU via TPC will own a significant majority of the shares in Cell C Holdings with Cell C's remaining
minority shareholders, including Nedbank and Lesaka, having been diluted significantly.
The acquisition and intended conversion of the Nedbank Claim under the Nedbank Claim Acquisition and
the settlement of the Lease Provider Claims shall result in a significant reduction of Cell C's debt position
and represents another strong step towards the simplification of Cell C's capital structure.
Nedbank and Lesaka have been invested in Cell C as minority shareholders for many years and are
supportive of BLU's proposed Restructuring and the Cell C Listing. Notwithstanding this, given that the
Restructuring transactions will all be implemented with reference to the ultimate Cell C listing price, there is
uncertainty as to the final value and shareholding of the Nedbank Shares and the Lesaka Shares. In order
to ensure that the Cell C minority shareholders are not adversely impacted as a result of the Restructuring,
Blu Label has agreed to provide Nedbank and Lesaka protection from this uncertainty risk, in the form of
the potential acquisition of the Nedbank Shares and the Lesaka Shares by TPC under the terms outlined in
paragraph 4 below.
From a BLU perspective, the Cell C Listing, together with the benefits to be derived from Cell C's turnaround
strategy and its improved sustainability, are expected to enhance the value of Cell C and in turn, restore its
shareholder value. Additionally, the Cell C Listing is expected to deliver significant benefits to both BLU and
to Cell C including:
• providing Cell C with access to capital markets on an independent basis, which it may use to
support further growth and to finance acquisitions or investments; and
• elevating the Cell C brand.
As per the publication of the Cell C presentations on 26 May 2025, 22 September 2025, 6 October 2025
and 20 October 2025, under the new leadership of the Cell C executive management team, Cell C has
transformed its business model and is well positioned for the next phase of its development. BLU continues
to believe in the strong investment case of Cell C, and the potential Cell C Listing and the separation of BLU
and Cell C are aimed at ensuring the future success of both businesses.
4. PROPOSED TERMS OF THE NEDBANK TRANSACTIONS AND THE LESAKA TRANSACTION
Terms of the Nedbank Claim Acquisition
TPC shall acquire Nedbank's claims against Cell C for a cash purchase consideration equal to the face
value thereof, plus accrued interest on the date of payment. This was an amount of R447,128,810.90 as at
31 October 2025. The effective date of the Nedbank Claim Acquisition (including the date for payment of
the consideration) is scheduled for 7 November 2025. BLU guarantees any and all payment obligations
which TPC has to Nedbank in respect of the Nedbank Claim Acquisition agreement.
Terms of the Nedbank Shares Acquisition
Should Cell C Holdings list at an equity value below a certain threshold, then TPC shall be required to
purchase the Nedbank Shares in Cell C Holdings for a purchase cash consideration of R96 million. Payment
and delivery shall be made within 5 business days of the Cell C Listing.
Should Cell C Holdings list at an equity value exceeding an agreed threshold, then Nedbank shall pay to
TPC a fee (exclusive of VAT) equal to the gross proceeds (calculated in accordance with the agreement
between Nedbank, Blu Label and TPC) of each and every sale by Nedbank of Nedbank Shares at any time
thereafter when the market capitalisation of Cell C Holdings is above an agreed threshold.
Should the Cell C Listing not occur by a specified date, in circumstances where Cell C shareholders have
exchanged their shares for shares in Cell C Holdings, then TPC shall acquire Nedbank's shares in Cell C
Holdings for a purchase consideration of R72 million ("Flip-Up Non-Listed Nedbank Sale"). If, following
the acquisition by TPC of the Nedbank Shares in terms of a Flip-Up Non-Listed Nedbank Sale, the Cell C
Listing is implemented prior to a specified date and (ii) the value which would have been attributable to the
Nedbank Shares on a Cell C Listing ("Listing Value") is more than R72 million, then TPC shall pay (as an
increase to the aforesaid consideration) an amount equal to the difference between R72 million and such
value; provided that such difference payment shall be at least R24 million so that Nedbank shall receive
aggregate consideration of minimum R96 million in such circumstances. If the Listing Value is R72 million
or lower, then TPC shall nevertheless be obliged to pay to Nedbank an amount equal to R24 million, such
that Nedbank is paid an aggregate purchase price of R96 million.
If by a specified date the Cell C Listco Flip-Up (as described in the Circular) has not been implemented,
then on such date TPC shall acquire Nedbank's shares in Cell C for a purchase consideration of R72 million.
BLU guarantees any and all payment obligations which TPC has to Nedbank in terms of the Nedbank
Shares Acquisition agreement.
The Nedbank Shares Acquisition will become effective subject to the fulfilment or waiver of the suspensive
conditions, which is expected to be on or about 7 November 2025.
Terms of the Lesaka Transaction
If (i) the Cell C Listing is implemented on or before a specified date; and (ii) the relevant value of the Lesaka
Shares at the Cell C Listing is less than R50 million, then Lesaka may elect to sell the Lesaka Shares to
TPC in exchange for a purchase cash consideration equal to R50 million. Lesaka is obliged to deliver its
election notice within five business days of the Cell C Listing and closing of the sale (including payment)
must be implemented on the tenth business day from the date of such notice.
Should the Cell C Listing not occur by a specified date (or TPC has given prior notice to Lesaka that the
Cell C Listing will not be proceeding), TPC shall acquire Lesaka's shares in Cell C for a purchase cash
consideration of R35 million ("Non-Listed Lesaka Sale"). Closing of the Non-Listed Lesaka Sale (including
payment) shall be implemented at an agreed date. If, following the acquisition by TPC of the Lesaka Shares
in terms of a Non-Listed Lesaka Sale, the Cell C Listing is implemented prior to a specified date and (ii) the
value which would have been attributable to the Lesaka Shares on a Cell C Listing is more than R35 million,
then TPC shall pay (as an increase to the aforesaid consideration) an amount equal to the difference
between R35 million and such value.
The Lesaka Transaction will become effective subject to the fulfilment or waiver of the suspensive
conditions, which is expected to be on or before a specified date.
5. THE NEDBANK TRANSACTIONS AND THE LESAKA TRANSACTION CONSIDERATION AND SETTLEMENT
It is advised the Nedbank Transactions and the Lesaka Transaction consideration and settlement terms are
included in paragraph 4 above.
6. SUSPENSIVE CONDITIONS TO THE NEDBANK TRANSACTIONS AND THE LESAKA TRANSACTION
The implementation of the Nedbank Transactions and the Lesaka Transaction are subject to the
fulfillment, or waiver, as the case may be, of various suspensive conditions, including that the consent of
TPC's institutional lenders and preference shareholders is obtained.
The Nedbank Transactions are also conditional upon the bridge loan, in terms of which funders to TPC
will make funding available to TPC to enable TPC to fund the Nedbank Claim Acquisition, becoming
unconditional.
7. CATEGORISATION OF THE ADDITIONAL EVENTS
The Nedbank Transactions and the Lesaka Transactions constitute a category 2 transaction as
contemplated in Section 9 of the JSE Listings Requirements and, as such, no Shareholder approval is
required.
The settlement of the Lease Provider Claims is not considered a categorisable transaction in terms of
Section 9 of the JSE Listings Requirements.
8. FINANCIAL EFFECTS OF THE NEDBANK TRANSACTIONS AND THE LESAKA TRANSACTION
The detailed pro forma financial effects of the Additional Events will be included as part of the Cell C
Holdings pre-listing statement ("PLS"), to be published in due course. The financial metrics provided below
relate to the standalone BLU and Cell C legal entities.
It is advised that:
• In respect of the Nedbank Claim Acquisition
o The consideration is R447,128,810.90 as per paragraph 5 above;
o The face value of the Nedbank Claim is R435 million as at 31 May 2025, being the date
of the latest audited Cell C annual financial information which was prepared in
accordance with IFRS;
• In respect of Cell C as it relates to the acquisition by TPC of the Nedbank Shares and the Lesaka
Shares:
o The net asset value of Cell C is (R8,306,695,000) as at 31 May 2025, being the date of
the latest audited annual financial information of Cell C which was prepared in
accordance with IFRS;
o The operating profits attributable to Cell C were R1,596,764,000 for the year ended 31
May 2025, being the latest audited annual financial information of Cell C which was
prepared in accordance with IFRS. The operating profit is calculated after taking into
account the depreciation charge of R507,638,000 in accordance with IFRS.
Sandton
5 November 2025
Financial Adviser and Transaction Sponsor to Blu Label and Cell C
Rand Merchant Bank (A division of FirstRand Bank Limited)
Financial Adviser to Blu Label
Investec Bank Limited
Legal Adviser to Blu Label
Werksmans Attorneys Inc.
Legal Adviser to Cell C
DLA Piper Advisory Services Proprietary Limited
Forward-looking information contained in this announcement
This announcement contains certain forward-looking statements which relate to the Group's possible future actions,
long-term strategy, performance, liquidity position and financial position. All statements other than statements of
historical fact are, or should be deemed to be, forward-looking statements. All forward-looking statements are solely
based on the views and considerations of the Board, and in particular as at the date hereof. These statements
involve risk and uncertainty as they relate to events and depend on circumstance that may or may not occur in the
future. These forward-looking statements are based on various estimates and/or assumptions subject to known
and unknown risks, uncertainties and other factors that may cause future events or the Group's actual results,
performance or achievements to differ materially from those expressed or implied by these forward-looking
statements. Investors are cautioned not to place undue reliance on the forward-looking statements. These forward-
looking statements have not been reviewed or reported on by the Group's external auditors.
BLU and its affiliates expressly disclaim any obligation or undertaking to update, review or revise any forward-
looking statement contained in this announcement whether as a result of new information, future developments or
otherwise, and the distribution of this announcement shall not be deemed to be any form of commitment on the
part of BLU to proceed with the Restructuring, to facilitate a separation and potential future listing of Cell C or any
other transaction or arrangement referred to in this announcement.
Important Information
The information contained in this announcement is for background purposes only and does not purport to be full or
complete. No reliance may be placed by any person for any purpose on the information contained in this
announcement or its accuracy, fairness or completeness.
This announcement does not constitute or form part of any offer or invitation to sell or issue, any offer or inducement
or invitation or commitment to purchase or subscribe for, or any solicitation of any offer to purchase or subscribe
for, any shares or securities in BLU, Cell C ListCo, Cell C or in any other entity in any jurisdiction.
This announcement is not for release, publication, or distribution, directly or indirectly, in or into the United States
(including its territories and possessions, any State of the United States and the District of Columbia), Australia,
Canada or Japan or any other jurisdiction if such distribution is restricted or prohibited by, or would constitute a
violation of, the relevant laws or regulations of such jurisdiction. If the distribution of this announcement and any
accompanying documentation in or into any jurisdiction outside of South Africa is restricted or prohibited by, or
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been sent for information purposes only and should not be copied or redistributed. Further, any persons who are
subject to the laws of any jurisdiction other than South Africa should inform themselves about, and observe, any
applicable requirements or restrictions. Any failure to comply with the applicable requirements or restrictions may
constitute a violation of the securities laws of any such jurisdiction.
There will be no public offer of securities in the United States, Canada, Australia and Japan.
The securities mentioned in this announcement (the "Securities") have not been and will not be registered under
the U.S. Securities Act of 1933, as amended (the "US Securities Act"), or under any securities laws of any state or
other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, renounced,
transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable
exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in
compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be
no public offer of the Securities in the United States.
In the United Kingdom, this communication is only directed at persons who are 'qualified investors' within the
meaning of Article 2(e) of Regulation EU 2017/1129 as it forms part of retained EU law by virtue of the European
Union (Withdrawal) Act 2018 who are also; (i) investment professionals falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005 (the 'Order'); (ii) high net worth entities falling
within Article 49(2)(a) to (d) of the Order; and (iii) other persons to whom it may be lawfully communicated (all such
persons in (i), (ii) and (iii) above, together being referred to as 'relevant persons'). In the United Kingdom, any
invitation, offer or agreement to subscribe for, purchase or otherwise acquire Securities will be engaged in only
with relevant persons. Any person in the United Kingdom who is not a relevant person should not act or rely on this
communication or any of its contents.
In any member state of the European Economic Area, this communication is only directed at qualified investors in
such member state within the meaning of the Prospectus Regulation EU 2017/1129, and no person that is not a
qualified investor may act or rely on this communication or any of its contents.
This announcement does not constitute or form a part of any offer or solicitation or advertisement to purchase
and/or subscribe for shares in South Africa, including an offer to the public for the sale of, or subscription for, or the
solicitation of an offer to buy and/or subscribe for, shares as defined in the South African Companies Act, No. 71
of 2008 (as amended) or otherwise (the 'Act') and will not be distributed to any person in South Africa in any manner
that could be construed as an offer to the public in terms of the Act. Accordingly, this announcement does not
constitute a 'registered prospectus' or an 'advertisement' relating to an 'offer to the public', as contemplated by the
Act. No prospectus has been, or will be, filed with the South African Companies and Intellectual Property
Commission in respect of this information.
The contents of this announcement have not been reviewed by any regulatory authority, other than the JSE. This
announcement does not take into account the investment objectives, financial situation or needs of any particular
person. Further, the information contained herein is only preliminary and indicative and does not purport to contain
any information that would be required to evaluate the Group, its respective financial position and/or any investment
decision.
This announcement is not intended to provide, and should not be relied upon for, accounting, legal or tax advice
nor does it constitute a recommendation regarding any potential securities offering. In particular, the information
contained in this announcement constitutes factual information as contemplated in section 1(3)(a) of the South
African Financial Advisory and Intermediary Services Act, No. 37 of 2002, as amended, and should not be
construed as an express or implied recommendation, guide or proposal that any investment in the Group, Cell C
Listco or Cell C, is appropriate to the particular investment objectives, financial situations or needs of any
prospective investor, and nothing in this announcement should be construed as constituting the canvassing for, or
marketing or advertising of, financial services in South Africa.
Date: 05-11-2025 09:40:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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