On paper at least, an acquisition of Cell C by Telkom makes sense. But Cell C is arguably in worse shape today than it was two years ago when Telkom tried and failed. By Hilton Tarrant.
Browsing: Blue Label Telecoms
Telkom wants to buy Cell C in a plan that will include reducing its troubled rival’s debt and renegotiating contracts with suppliers, according to people with knowledge of the situation.
Not enough attention is paid to the extent to which Vodacom, the country’s largest mobile operator, leverages resources from (and executes the global strategy of) parent Vodafone.
Blue Label Telecoms, which bought a 45% stake in Cell C in 2017 for R5.5-billion, has said in its annual report that it is “extremely disappointed” in the performance of the mobile operator.
Blue Label Telecoms co-founders and co-CEOs Brett and Mark Levy are stepping down as non-executive directors of the Cell C board with immediate effect.
South Africa’s third-biggest mobile operator has put core parts of the business up for sale as it struggles with R9-billion of debt and deepening losses.
A group of local banks have committed to provide temporary liquidity and extended the maturity of R1.2-billion of debt that was due to be repaid last month, Cell C said.
TechCentral sat down with Cell C’s CEO and chief financial officer to discuss the operator’s plan not only to pull itself back from the brink but to put itself on a sustainable financial footing.
A day before Blue Label Telecoms reports its annual results, the technology group has announced it will sell various businesses, including part of 3G Mobile, to deleverage its balance sheet.
Shares in Blue Label Telecoms enjoyed a rare upswing on Friday, a day after it issued a trading update that showed its core business continues to perform well despite the ongoing woes at Cell C.