JSE issues yet another threat to delist Blue Label

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Mark and Brett Levy, joint-CEOs of Blue Label Telecoms.
Mark and Brett Levy, joint-CEOs of Blue Label Telecoms.

Tough times continue to bedevil Blue Label Telecoms as the company received yet another threat of delisting from the Johannesburg bourse for failing to fulfil stipulated requirements.

This is the second time in two weeks that the Johannesburg Stock Exchange (JSE) has publicly reproved Blue Label, which has been battling with its R5 billion investment in struggling telco Cell C.

The mobile operator reported a loss of R8 billion for the past financial year and its net debt, excluding finance leases, has ballooned from R7.44 billion to R8.24 billion.

The huge loss also negatively impacted Blue Label Telecoms, which holds 45% of Cell C’s shareholding. The company declared a core headline loss of 304.77c per share for the year ended May.

Yesterday, the JSE chastised the company for failing to distribute its financial statements.

“The JSE wishes to advise that (Blue Label Telecoms) has failed to distribute its annual financial statements and notice of annual general meeting (Annual Report) within the four-month period stipulated in the JSE’s Listings Requirements,” reads the statement.

The bourse added that Blue Label has already be flagged for its transgressions.

“Accordingly, the company’s listing on the JSE trading system has been annotated with a ‘RE’ to indicate that it has failed to comply and that the listing of this company’s securities is under threat of suspension and possible removal.”

Similarly, on 17 September 2019, the JSE issued the first warning of possible suspension from the stock exchange due to delays in submitting provisional financial results as per the regulations.

Blue Label has been under pressure for some time, and last week, the company announced that trading losses and debt problems at Cell C pushed it into a R6.6 billion loss in the year to end May.

The astronomical loss is double the company’s market capitalisation of R3 billion.

Blue Label has since announced that it is selling some of its business units to raise R1 billion.

The company said the funds obtained from the proposed transactions will be applied to reduce the company’s current interest-bearing debt.

Assets on the go include the company’s interests in Blue Label Mobile (or VAS Operations) to be taken over by DNI, an investment holding company that specialises in distribution and retail for the telecommunications industry.

Additionally, its subsidiary, The Prepaid Company, has agreed to sell its interest in 3G Mobile, excluding the share capital held in and loan claims against Comm Equipment Company to DNI and together with the VAS Operations transaction.

VAS Operations provides mobile phone users with an ecosystem of services that include smartphone applications, wireless application protocol, multimedia messaging services, e-mail, location-based services, instant messaging, Web messaging, SMS and unstructured supplementary service data.

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