JSE-listed Blue Label on Friday said it is considering a possible restructure to facilitate a separation and potential future listing of Cell C on the JSE.

The proposed restructure, with various ancillary transactions, is aimed at optimising Cell C's capital structure and balance sheet in preparation.

“The proposed restructure of the group is expected to deliver significant benefits for the company and its shareholders. Should the proposed restructure of the group be implemented, it will facilitate a separation and potential future listing of Cell C from Blue Label's existing distribution businesses, allowing investors to independently assess the value and strategic focus of each business,” Blue Label said in a update to shareholders.

The implementation of the restructure and potential listing will remain subject to approval by the boards of Blue Label and Cell C, requisite shareholder and regulatory consents, and favourable market conditions, besides others.

Key components of the proposed restructure include Blue Label subsidiary The Prepaid Company (TPC) transferring the Cell C airtime currently held on its balance sheet to Cell C in exchange for newly issued additional equity in Cell C.

Further, TPC's outstanding debt claims against Cell C will be capitalised and converted into equity, further reducing Cell C's leverage.

Part of the restructure includes Cell C acquiring 100% of Comm Equipment Company (CEC), which is responsible for Cell C's postpaid offerings, from TPC in exchange for additional Cell C shares.

The internalisation will enable Cell C to assume full responsibility over its postpaid customer base, including oversight of supply chain, commercial operations, marketing, billing, credit and collections.

In addition, the special purpose vehicles currently holding equity interests in Cell C will also be restructured as part of the broader initiative, aligning their ownership structures with the redefined capital framework.

“Overall, the restructure is intended to streamline operations, improve financial sustainability and enhance Cell C's strategic readiness for long-term growth and potential listing,” Blue Label commented.

Blue Label issued a cautionary to its shareholders as the proposed interconditional restructure of the group, as well as the potential future listing of Cell C, may have a material effect on the price of the securities of Blue Label.

“As the terms and conditions of the proposed restructure of the group, as well as ancillary transactions, are still being developed with the group's financial advisers and are subject to ongoing engagement and approvals by the board, Blue Label's shareholders are advised to exercise caution when dealing in the company's shares until a further announcement is made.”