Currently viewing: 6. Investments in and loans to associates and joint ventures | Next: 7. Financial instruments at fair value through profit and loss
| Cost and share of reserves | Loans | Investments and loans | ||||||||||
| 30 November 2025 Unaudited R'000 |
31 May 2025 Audited R'000 |
30 November 2025 Unaudited R'000 |
31 May 2025 Audited R'000 |
30 November 2025 Unaudited R'000 |
31 May 2025 Audited R'000 |
|||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cell C | 5 894 367 | 1 701 197 | — | 3 245 909 | 5 894 367 | 4 947 106 | ||||||
| Other associates and joint ventures | 128 678 | 108 090 | 3 497 | 3 853 | 132 175 | 111 943 | ||||||
| 6 023 045 | 1 809 287 | 3 497 | 3 249 762 | 6 026 542 | 5 059 049 | |||||||
| Disclosed as: | ||||||||||||
| – Non-current assets | 4 585 950 | 1 809 287 | — | 1 302 614 | 4 585 950 | 3 111 901 | ||||||
| – Current assets | 1 437 095# | — | 3 497 | 1 947 148 | 1 440 592 | 1 947 148 | ||||||
| # | Refer to note 10. |
| Investment in Principal activity Country of incorporation |
Associate Cell C Network provider South Africa |
Other associates and joint ventures* | Total | |||||||||
| 30 November 2025 Unaudited R'000 |
31 May 2025 Audited R'000 |
30 November 2025 Unaudited R'000 |
31 May 2025 Audited R'000 |
30 November 2025 Unaudited R'000 |
31 May 2025 Audited R'000 |
|||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost and share of reserves | ||||||||||||
| Cost and share of reserves at the beginning of the period | 1 701 197 | — | 108 090 | 98 333 | 1 809 287 | 98 333 | ||||||
| Share of (losses)/profits from associates and joint ventures | (64 974)1 | (98 653) | 27 745 | 43 277 | (37 229) | (55 376) | ||||||
| Share of (losses)/profits after tax | (60 883) | (69 278) | 27 745 | 43 277 | (33 138) | (26 001) | ||||||
| Amortisation of intangible assets | (5 604) | (102 739) | — | (5 604) | (102 739) | |||||||
| Deferred tax on the amortisation of intangible assets | 1 513 | 73 364 | — | 1 513 | 73 364 | |||||||
| Revaluation of investment in Cell C2 (note 6.2.1) | 841 077 | — | — | — | 841 077 | — | ||||||
| Additional investment | 358 5013 | 241 229 | — | 740 | 358 501 | 241 969 | ||||||
| Cell C becomes a subsidiary (note 6.2.1) | (2 835 801) | — | — | — | (2 835 801) | — | ||||||
| Cell C becomes an associate note 6.2.2) | 5 894 367 | — | — | — | 5 894 367 | — | ||||||
| Foreign currency translation reserve | — | — | (1 423) | 538 | (1 423) | 538 | ||||||
| Dividends received | — | — | (5 734) | (13 372) | (5 734) | (13 372) | ||||||
| Disposal of joint venture | — | — | — | (17 847) | — | (17 847) | ||||||
| Reversal of impairment of investment in associate | — | 1 558 621 | — | (3 579) | — | 1 555 042 | ||||||
| Cost and share of reserves at the end of the period | 5 894 367 | 1 701 197 | 128 678 | 108 090 | 6 023 045 | 1 809 287 | ||||||
| Loans to associates and joint ventures | ||||||||||||
| Loans at the beginning of the period | 3 245 909 | 2 359 065 | 3 853 | 53 954 | 3 249 762 | 2 413 019 | ||||||
| Loans advanced to associates and joint ventures4 | 222 816 | 1 117 366 | — | 29 261 | 222 816 | 1 146 627 | ||||||
| Loans repaid by associates and joint ventures | (85 668) | (538 260) | (212) | (43 873) | (85 880) | (582 133) | ||||||
| Loans waived | — | — | — | (23 496) | — | (23 496) | ||||||
| Expected credit loss | 8 268 | 307 738 | (144) | (11 993) | 8 124 | 295 745 | ||||||
| Effective settlement upon obtaining control of Cell C (note 6.2.1) | (3 391 325) | — | — | — | (3 391 325) | — | ||||||
| Loans at the end of the period | — | 3 245 909 | 3 497 | 3 853 | 3 497 | 3 249 762 | ||||||
| Closing net book value | 5 894 367 | 4 947 106 | 132 175 | 111 943 | 6 026 542 | 5 059 049 | ||||||
| * | The Group also has interests in a number of individually immaterial associates and joint ventures that are accounted for using the equity method which are aggregated under “other associates” and “other joint ventures”. |
| 1 | This represents BLU's share of Cell C losses for only three months, because Cell C has been equity accounted from 1 June 2025 – 31 August 2025 and has been consolidated from 1 September 2025 – 24 November 2025. |
| 2 | TPC's economic interest was deemed to be disposed of at its fair value yielding a gain of R841 million. |
| 3 | Cell C shares purchased from SPV1's bond trustees and Gramercy. Refer to 6.2.1 for further information. |
| 4 | Loans advanced to associates and joint ventures also include the interest accrued on existing loans. |
During the six months ended 30 November 2025, there were significant changes in TPC's shareholding in Cell C, detailed as follows:
| Notes | Percentage | |
|---|---|---|
| Shareholding with voting rights | 49.53 | |
| Economic interest without voting rights | 20.47 | |
| SPV4 – Loan to SPV4 | 5.47 | |
| SPV4 – Sale of a 5% shareholding in Cell C to SPV4 on loan account | 5.00 | |
| SPV5 – Loan to SPV5 | 10.00 | |
| Total economic interest as at 31 May 2025 | 70.00 | |
| 10.13 | ||
| Purchase of shares from SPV1's bond trustees | 4.04 | |
| Purchase of shares from Gramercy | 6.09 | |
| Total economic interest upon acquiring control | 80.13 | |
| Additional shares obtained in the Cell C pre-listing restructuring | 99.56 | |
| Debt to equity conversions | 0.01 | |
| Sale of CEC in exchange for shares | 22.47 | |
| Return of Cell C airtime for shares | 77.08 | |
| Purchase of additional shares from SPV4 | 0.00 | |
| Dilution | (79.77) | |
| Total shareholding and economic interest after the Cell C pre-listing restructuring | 99.92 | |
| Sale of shares to Cell C management | (4.50) | |
| Sell down | (30.00) | |
| Total economic interest as at 30 November 2025 | 65.42 | |
| Sale of shares to Sisonke Growth Partners Proprietary Limited (note 6.2.2) | (15.95) | |
| Total shareholding as at 30 November 2025 | 49.47 | |
| Total economic interest as at 30 November 2025 is accounted for as follows: | 65.42 | |
| Equity accounted | 49.47 | |
| Non-current assets classified as held for sale | 10 | 15.95 |
Details of the changes in the investment in Cell C are set out below:
Receiving approval from the Competition Commission made it possible for TPC to acquire an additional 10.13% stake in Cell C (4.04% from SPV1's bond trustees and 6.09% from Gramercy), thereby increasing its economic interest in Cell C to 80.13%.
From a financial reporting perspective, upon Cell C becoming a subsidiary on 4 September 2025, it was deemed that:
Business combination accounting required BLU to reflect the effective settlement (derecognition), at fair value, of pre-existing relationships between the BLU Group and Cell C because upon acquiring control of Cell C, Cell C and BLU became a single reporting entity. These comprised the following:
| Carrying value as of 4 September 2025 R'000 |
Fair value as of 4 September 2025 R'000 |
Gain to BLU on effective settlement R'000 |
||||
|---|---|---|---|---|---|---|
|
3 391 325 | 3 391 325 | — | |||
|
94 025 | 94 025 | — | |||
|
(187 499) | (187 499) | — | |||
|
4 884 431 | 5 365 138 | 480 707 | |||
| Cell C airtime (inventory) | 3 552 144 | |||||
| Prepayments for Cell C airtime (included in trade receivables) | 1 332 287 | |||||
|
827 810 | 827 810 | — | |||
|
379 627 | 379 627 | — | |||
|
(223 509) | (223 509) | — | |||
| TOTAL | 9 166 210 | 9 646 917 | 480 707 |
Although the purchase price of TPC's economic interest of 80.13% was calculated as R2.836 billion, after taking into account the fair value of what BLU received upon the effective settlement of the pre-existing relationships of R9.647 billion, it means that BLU effectively paid R12.483 billion to acquire 80.13% of the assets and liabilities of Cell C that do not relate to transactions or relationships with BLU. BLU elected to measure the non-controlling interest ('NCI') of 19.87% at its fair value of R703 million upon acquiring control of Cell C. Therefore, for the purposes of the purchase price allocation ("PPA") required by business combination accounting, the total purchase price for 100% of the assets and liabilities of Cell C that do not relate to transactions or relationships with BLU was calculated as R13.209 billion. The PPA is shown below with goodwill being the excess of the total purchase price over the net identifiable assets and liabilities of Cell C recognised by BLU.
Ahead of Cell C's listing on 27 November 2025, TPC sold shares in Cell C to third party investors, comprising an aggregate stake of 30% for cash of R2.703 billion. Based on the sell-down price, the market capitalisation of the new Cell C Group (which includes CEC) upon listing was R9.010 billion. Upon the sell-down, TPC lost control of Cell C as a result of its shareholding and voting rights being reduced to 49.47% which only gives TPC significant influence. As a result, the new Cell C Group was deconsolidated and the remaining investment recognised as an investment in an associate. Since the sale of the 15.95% stake in Cell C to Sisonke has not been treated as a sale for accounting purposes, TPC's investment in associate represents its economic interest in Cell C of 65.42%, which was measured initially at R5.894 billion based on the market capitalisation of the new Cell C Group. Included in the carrying value is goodwill of R404 million, which has been calculated on a provisional basis. A loss of R6.027 billion was incurred on the sell-down and is recognised in other expenses in the statement of comprehensive income.
The 15.95% stake is classified as a non-current asset held for sale. Refer to note 10 for further information.
As of 30 November 2025, TPC's shareholding (and voting rights) in Cell C was 49.47% which increased to 49.53% in December 2025 after acquiring additional Cell C shares from Nedbank and Lesaka (refer to note 11).
The Cell C Board of Directors makes decisions that significantly affect Cell C's returns (the relevant activities). TPC has no rights to appoint any directors on the Cell C Board. The appointment of directors is by ordinary resolution and given that TPC does not hold a majority of the shareholder voting rights, TPC cannot unilaterally pass such ordinary resolution. Accordingly, TPC does not control the Cell C Board and therefore does not control Cell C.
It is noted that although TPC's economic interest includes the 15.95% stake in Cell C that was sold to Sisonke (refer to note 6.2), TPC has no ability to direct how the voting rights attached to these shares are exercised. Sisonke holds these voting rights. In addition, although TPC has the right to repurchase the shares sold to Sisonke, doing so requires the prior approvals of the Competition Commission and the Independent Communications Authority of South Africa ("ICASA") and it is unlawful to give effect to a transaction before such approval is obtained.
Furthermore, given that Cell C is now listed and there have been significant changes in its shareholders, there is currently no basis for concluding that TPC's voting rights will constitute the majority of the voting rights cast at a Cell C shareholders' meeting. Therefore, there is no basis for concluding that TPC has de facto control over Cell C. Since TPC has significant influence, Cell C is classified as an associate at 30 November 2025.
Cell C had an excess of current liabilities over current assets of R2.34 billion (2024: R8.05 billion). During the reporting period, Cell C encountered liquidity constraints predominantly attributable to the seasonal nature of working capital requirements and elevated cash outflows related to Cell C's technological modernisation drive, capacity rebasing and capex investment payments. In response, Cell C management has prepared detailed cash flow forecasts extending at least twelve months beyond the approval date of these financial statements, incorporating rigorous downside scenario analyses that consider key variables such as revenue trends, customer churn, device financing recoveries, and the availability of funding. These forecasts reflect the implementation of a range of mitigation strategies currently in progress, including cost optimisation initiatives, the deferral of selected non-essential capital projects and the better utilisation of the facilities available to Cell C. Based on the outcomes of these assessments and the mitigatory actions undertaken, the Directors of Cell C are satisfied that Cell C will maintain adequate liquidity to meet its obligations as they fall due for the foreseeable future. Accordingly, the Directors of Cell C have not identified any material uncertainties that may cast significant doubt on its ability to continue as a going concern.
An investment in an associate or joint venture is tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
The Group assesses at each reporting date whether such indicators exist. Similarly, the investment in an associate or joint venture is subsequently reassessed for indications of impairment loss previously recognised that may no longer exist. If there is an indication that an impairment loss has reversed, the Group is required to estimate the recoverable amount of the previously impaired investment. The impairment loss is reversed if the recoverable amount exceeds its carrying amount. The recoverable amounts of the investment in an associate or joint venture are determined based on value-in-use calculations. Where such calculations are performed, it would require the use of estimates.
As at 30 November 2025, there was no indication of an impairment, and as such, the Group did not estimate the recoverable amount of the investment in Cell C.
