Telecommunications and technology company Cell C is moving forward on plans to list all of its issued ordinary shares on the prime segment of the main board of the JSE.

In an update to shareholders on Wednesday, JSE-listed Blu Label Unlimited Group said that this would be through an offering of existing shares by wholly-owned subsidiary The Prepaid Company (TPC) by way of a private placement to qualified investors.

The move is subject to market conditions and to JSE approval.

The Cell C group will comprise the company and its subsidiaries, including Cell C and Comm Equipment.

“The decision to pursue a listing on the JSE marks a significant and exciting step in Cell C's growth story. The listing is expected to be an enabler of our strategy, as it will elevate the Cell C brand, enhance access to capital to sustain growth, instil public transparency and market discipline and enhance the group's profile with all stakeholders,” said Cell C CEO Jorge Mendes.

“While Cell C is already owned by a listed entity and has operated within that framework, the separate listing will enable the group to streamline its balance sheet, reinforce its growth strategy and strengthen its competitive positioning of business segments.”

TPC will also make an offer for the sale of shares held by TPC to selected prospective investors, overall intending to raise gross proceeds of about R7.7-billion, including a R500-million overallotment option and an allocation of shares of about R2.4-billion to an empowerment vehicle (BEE SPV).

TPC intends to use the proceeds to strategically enhance its financial position, allocated to settling certain interest-bearing borrowings and other debt obligations.

Further, a portion of the funds will be earmarked for dividends to shareholders, while the remaining excess proceeds will be directed towards meeting working capital requirements, enabling TPC to capitalise on trading opportunities.

The offer and listing will provide Cell C with access to capital markets, to support and develop further growth of the company and to finance acquisitions of, or investments in, businesses, technologies, services, products, software, intellectual property rights, spectrum and other assets in the future.

It is also expected to raise Cell C's profile and visibility with its key partners and elevate the Cell C brand and increase stakeholder awareness regarding its vision, strategy and operations.

From a Blu Label perspective, the listing of Cell C, together with the benefits to be derived from the successfully completed turnaround strategy and its improved sustainability, will enhance the value of Cell C and in turn restore its shareholder value.

FirstRand Bank division Rand Merchant Bank (RMB), Investec Bank and Morgan Stanley & Co International, collectively the managers, are acting as joint global coordinators and joint bookrunners in relation to the offer and listing. Bowman Gilfillan and Milbank have been appointed as legal advisers for the managers.

RMB has been appointed as financial adviser and transaction sponsor to Blu Label and Cell C. Investec has been appointed as financial adviser to Blu.

DLA Piper Advisory Services has been appointed as legal adviser to Cell C and the company, while Werksmans Attorneys has been appointed as the legal adviser to Blu Label and TPC.

The listing announcement emerged as Blu Label’s TPC progresses many of the various agreements that it and Cell C have entered as a restructure and imminent listing of Cell C moves forward.

This includes agreements with Nedbank, Lesaka Technologies and a material lease provider that will help reduce Cell C's debt position.

Blu Label, along with TPC, reached an agreement with Nedbank to acquire its loan claim against Cell C.

In terms of the agreement, TPC will acquire the R447-million Nedbank claim, converting it to equity under the same terms as the debt-to-equity transactions of the restructuring programme.

TPC has also agreed to acquire Nedbank's shareholding in Cell C, which, together with an agreement to acquire Lesaka Technologies’ shareholding in Cell C, constitutes a Category 2 transaction in terms of the JSE listing requirements.

Blu Label 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.

Post the implementation of the restructuring, it is expected that Blu Label, through 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 implementation of the Nedbank and Lesaka transactions are subject to the fulfilment or waiver 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.

Further, Cell C has reached agreement with a material lease provider to settle the existing balances owed, settling all the lease provider claims for a cash amount of R750-million, which will 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.