Blue Label’s Prepaid Company Acquires Major Debt Claim Against Cell C in Strategic Deal
Blue Label’s subsidiary acquires ZAR450 million debt claim from Gramercy, reinforcing its commitment to Cell C’s restructuring, potentially boosting shareholder returns and enhancing telecom market stability.

The board of directors of Blue Label has advised its shareholders that The Prepaid Company Proprietary Limited (“TPC”), a wholly owned subsidiary of Blue Label, has concluded a binding term sheet with Gramercy SA Telecom Holdings LLC (“Gramercy”), in terms of which TPC will acquire a debt claim (“Claim”) which Gramercy has against Cell C Limited (“Cell C”). The acquisition of the Claim will be referred to as the “Transaction”.
Gramercy’s beneficial owners are various comingled funds and a large UK corporate pension plan (the “Funds”). The Funds and their investors are not “related parties” in relation to Blue Label, as defined in the JSE Listings Requirements.
Cell C is a leading mobile provider in South Africa offering a wide range of products and services, including voice, data, device and SIM cards. Cell C has initiated a strategic turnaround plan focused on improving operational efficiencies, cutting costs, and optimising network traffic. This strategy involves a substantial reduction in capital expenditures and a shift from a fixed-cost infrastructure model to a flexible, variable operating expenditure model.
For Blue Label, this acquisition, combined with the anticipated benefits from Cell C’s turnaround and sustainability initiatives, is expected to strengthen its investment value and support shareholder returns. Having a history of supporting Cell C’s financial restructuring, this transaction further demonstrates Blue Label’s commitment to stabilising Cell C as a key player in South Africa’s telecom market. Through this transaction, TPC solidifies its position in Cell C’s capital structure, potentially leading to greater financial stability and enhanced returns.
On 21 September 2022, inter alios, Cell C and Gramercy entered into a certain Gramercy Reinvested Term Loan Agreement (“Gramercy Facility Agreement”). In terms of the Gramercy Facility Agreement, Gramercy has a Claim against Cell C of ZAR414,765,527.00 plus interest, which Claim is payable by the end of March 2026. If any proceeds are available from a quarterly cash waterfall funds flow formula calculation, then prepayments may be made before that date but none have been forthcoming.
On 11 November 2024, TPC and Gramercy concluded a binding term sheet, which has conditions usual for a transaction of this nature, in terms of which TPC agrees to acquire the Claim from Gramercy for a purchase consideration of ZAR450,000,000 (“Claim Purchase Price”) (which is the face value of the Claim). The Claim Purchase Price is payable in four non-interest bearing instalments of ZAR112,500,000 each in cash, funded from own cash resources or existing facilities, on closing of the Transaction and at the end of November 2025, March 2026 and November 2026. Should TPC fail to make any scheduled payments, default interest will accrue on the outstanding amount at a rate of 15% per annum.