Blue Label Telecoms has suspended two senior executives pending an investigation into possible irregularities, details of which the JSE-listed group has declined to disclose at this stage.
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Mobile operator Cell C has reported R2.3-billion in profit before tax, a huge turnaround in fortunes from the R10.6-billion PAT loss it reported a year ago.
Cell C’s largest shareholder, Blue Label Telecoms, disclosed on Thursday that a term sheet to recapitalise the mobile operator has finally been signed after protracted negotiations.
JSE-listed Blue Label Telecoms, which owns 45% of mobile operator Cell C, said on Friday that it will report a big jump full-year headline earnings when it reports results next week.
Cell C is showing signs of having turned the corner, at least when it comes to its income statement – the company’s balance sheet still needs fixing through a planned recapitalisation.
Blue Label Telecoms will report slight growth in headline earnings per share of between 0% an 4% for the six-month reporting period ended 30 November 2020.
Under the terms of the proposed transaction, existing airtime lenders will provide R4.25-billion in new super-senior debt secured by a significant portion of Cell C’s assets, excluding spectrum, according to sources.
Blue Label Telecoms has sold its interest in Blue Label Mexico to its partner in the business, multinational bakery products company Grupo Bimbo, for $11.5-million.
Cell C’s largest shareholder, Blue Label Telecoms, is confident a recapitalisation of the mobile operator will be completed in the coming months and that this will put it on a new growth trajectory.
Financially distressed mobile operator Cell C expects to close 128 retail stores around the country, with 546 jobs on the line, as it moves to reduce costs and become a more sustainable business.