Virgin Mobile South Africa, the first virtual mobile network operator to be launched in the country, has been placed into voluntary business rescue.
The company’s CEO, Zak van de Merwe, told TechCentral via phone on Friday that it had become necessary to seek business rescue to restructure the company and stave off collapse. He blamed the impact of Covid-19 and the lockdown for the need for the business rescue process, which is a form of bankruptcy protection.
Today, Virgin Mobile is largely a prepaid mobile business. It was launched in 2006 with great fanfare by Virgin Group founder Richard Branson. Virgin Group is no longer an investor after a shareholding change last year.
TechCentral couldn’t immediately determine who the company’s current shareholders are. Van de Merwe declined to comment on specific questions, including the shareholder make-up and how many employees might be affected by a planned restructuring, citing sensitivities around the business rescue process.
In a statement e-mailed to TechCentral by Van de Merwe late on Friday, Virgin Mobile said: “As you are very aware, the past year has been an enormously trying time for all South African businesses and I can confirm that we have filed for voluntary business rescue as a consequence of the impact of the national lockdown shortly after a change of ownership in the business.”
‘Care and sensitivity’
“This process is, as you can imagine, a very difficult one for all the stakeholders associated with any business and I’m therefore cautious to ensure that we approach any conversations in this respect with the care and sensitivity that they demand. Our primary focus remains on ensuring that we care for our customers, employees and stakeholders.”
Van de Merwe said, however, that he is optimistic that Virgin Mobile will emerge successfully from business rescue and said that a rescue plan has been developed. He said Virgin Mobile customers can still access the Cell C network and use mobile services. — © 2020 NewsCentral Media
