Blue Label, Net1 delay publication of financial results amid Cell C woes
13 September 2019
Net1 Technologies has delayed the publication of its financial results due to the ongoing financial crisis at South African cellco Cell C, thus becoming the second JSE-listed company to postpone its financials’ release after Cell C’s majority parent Blue Label Telecoms, TechCentral reported. Net1 participated in the 2017 recapitalisation of the mobile operator and owns 15% of its equity. In a statement to shareholders, Net1 said it was rescheduling the publication of its audited financial results ‘in order to allow more time for clarification on various developments in respect of the proposed transactions at Cell C’, as this information was expected to ‘significantly impact the carrying value of its Cell C investment as of 30 June 2019’. Both Blue Label and Net1 are expected to publish their results on 26 September.
In 2017, Cell C emerged from a protracted debt-restructuring rescue plan with Blue Label Telecoms taking a 45% stake in the company for ZAR5.5 billion (USD371 million). The cellco accumulated a debt of ZAR8.9 billion by the end of 2018, ZAR2.9 billion more than the forecasts expected by its majority shareholder, Blue Label Telecoms, which was aiming to have reduced Cell C’s debt by ZAR20 billion to ZAR6 billion when the recapitalisation of the telecoms company was finalised in August 2017. TeleGeography notes that in February 2019 Buffet Consortium, backed by billionaire Jonathan Beare, agreed to become a minority shareholder in the operator, with Cell C saying at the time that ‘a further detailed announcement will be made once the parties have executed the transaction documents required to give effect to the principles recorded in the binding term sheet’.