Cell C still waiting for fresh capital
Mobile operator Cell C will have to wait a bit longer for a new refinancing deal to be concluded.
This follows a fresh caution yesterday by the company’s biggest shareholder, Blue Label Telecoms, which is still negotiating with potential funders.
Blue Label Telecoms, which holds a 45% stake in Cell C, first announced in August that it had concluded a term sheet for an airtime purchase transaction with Investec, Rand Merchant Bank for the recapitalisation.
Yesterday, for the third time, Blue Label renewed its caution on the potential deal: “Further to the cautionary announcements dated 26 August 2021 and 11 October 2021, Blue Label shareholders are advised to continue to exercise caution when dealing in their Blue Label shares.”
As negotiations to recapitalise the financially-strained Cell C continue, analysts recently warned that lengthy further delays in injecting fresh capital in the business will make it difficult for the operator to remain competitive.
Nonetheless, Cell C has remained focused on its turnaround strategy, which includes ensuring operational efficiencies, restructuring the balance sheet, implementing a revised network strategy and improving overall liquidity.
The telco recently signalled optimism, buoyed by an improved half-year performance in which it reported R148 million profit before tax.
In the six months ended June, Cell C turned to profitability from a R7.6 billion loss reported year-on-year.
Earnings before interest and taxes also increased to R736 million (H1 2020: R5.3 billion loss).
Operational expenditure decreased by 25% to R1.7 billion, compared to R2.2 billion during the same period in 2020.
Cell C’s total subscriber base has also grown and now has close to 13 million customers. Last year, the company had 11.7 million subscribers in the comparable period.