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.
Cell C said on Tuesday that it is making “good progress” in what it calls a “complex recapitalisation” aimed at ensuring the financially troubled mobile operator survives the debt noose around its neck.
Blue Label Telecoms will take a R330-million knock to its earnings after it decided to close its WiConnect retail stores, which it opened in partnership with Edcon Group starting in 2015.
Cell C’s planned recapitalisation remains the subject of discussions with potential investors, despite a plan, announced last month, to retrench almost 40% of its workforce.
Cell C has begun a consultation process under the Labour Relations Act that is likely to result in 960 employees – or almost 40% of the company’s workforce – being retrenched.