Cell C has begun talks to delay debt payments and hired consultants to probe its business practices and advise on a restructuring.

The company has implemented “significant austerity measures” such as cost cuts, a review of contracts and a hiring freeze, said Douglas Craigie Stevenson, Cell C’s chief executive officer, in an open letter to stakeholders.

Shares in Blue Label Telecoms, Cell C’s biggest investor, fell 13%.

Cell C has been labouring under R8.9-billion of debt as it tries to compete with Vodacom and MTN — well established carriers that control the bulk of the South African market in wireless services and operate the biggest networks. Cell C has R2.6-billion rand of debt maturing in August 2020.

“We are engaging with our lenders to re-term our debt and allow us sufficient time to implement the Buffet transaction,” wrote Craigie Stevenson, referring to plans to sell a stake in Cell C to a consortium of investors. Craigie Stevenson replaced Cell C’s CEO Jose Dos Santos earlier this year.

Cell C’s problems have weighed on Blue Label, which holds a 45% stake in Cell C and led a R5.5-billion recapitalisation of the company almost two years ago.

PricewaterhouseCoopers will audit Cell C’s procurement practices and review processes, and law firm Bowmans will investigate any irregular business practices, according to the letter. Deloitte has been named as an independent financial restructuring adviser.