Blue Label Telecoms' chairman recently bought millions of rands worth of shares in the company, adding almost R1 million of the stock over the past few days.
The firm announced the purchase through a SENS announcement yesterday. This confirmed independent non-executive chairman, Larry Nestadt, on 19 October bought 100 000 shares at R4.88 and then on 22 October bought another 100 000 shares at R5 per share, which together make up just shy of R1 million worth of shares. He purchased the shares through the LM Nestadt Trust.
The LM Nestadt Trust, on 8 October, also bought R1.1 million worth of shares in Blue Label, and on 9 October, another R1.1 million in shares. The following day, 10 October, the trust added R545 900 more to its portfolio of shares, to total almost R3.8 million in shares just this month.
The group's share price has been under serious pressure since it bought into mobile operator Cell C last year. The stock has fallen by 71% in the last 12 months and was trading on the JSE this morning at R4.90 per share. Due to the share price's deterioration, the group's market cap is down to R4.638 billion.
In Nestadt's chairman's statement, as part of Blue Label's 2018 integrated annual report, he said he and the board were "naturally concerned about the decline in the share price, which we believe is largely attributable to uncertainty with respect to Cell C's turnaround strategy, current debt levels and requirements for further funding".
He noted the concerns would be largely negated on the proviso that Cell C delivers on its business plan.
"The acquisition of Cell C was both of a defensive nature and created an opportunity for earnings growth. The acquisition was defensive, in that it protects Blue Label from possible disintermediation by mobile network operators, and earnings enhancing in that we can assist in turning the company around through continuing capital restructure and executing their strategic objectives," Nestadt added.
On 2 August 2017, Blue Label, through its wholly-owned subsidiary The Prepaid Company, acquired 45% of Cell C for R5.5 billion.
Independent non-executive director Joe Mthimunye also made some recent purchases of shares. He bought R98 200 worth of shares on 19 October through associate company, Grapevine Property Investments, and another R98 578 worth on 22 October in his personal capacity.
On 8 October, Mthimunye's Grapevine Property Investments also bought almost R14 284 worth of shares; on 9 October, the associate bought R113 400 in shares and an additional R241 050 on 10 October. Also on 10 October, he bought R105 600 worth of shares in his personal capacity.
In September, Mthimunye bought R132 000 in shares through Grapevine Property Investments and another R131 867 directly.
Mthimunye and Grapevine Property Investments together bought almost R935 000 worth of shares over the last two months.
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