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- Cell C said it is focusing on recapitalization and any mention of the Cell C sale was just speculation.
- According to the CFO of Cell C, the company has a balance problem due to an inherited debt in which they have incurred and not to a financial condition problem.
- More than 500 jobs will be eliminated as the mobile operator closes physical stores.
Ailing mobile operator Cell C plans to more than halve its retail footprint from 240 to 128 stores and cut as many as 546 jobs after reporting a loss of R 7.5 billion over the six months to the end of June.
“We have staggered store closures because we are forced to save cash,” said Craigie Stevenson, Cell C chief executive, in a results presentation Tuesday.
He said they needed to redesign their retail model and redesign the way they go to market with their product. “It is the future of where we will position ourselves as a network. It just doesn’t make sense anymore, if you look at the current business model, to keep building stores.
“We never envisioned a black swan event like Covid-19 and the way consumer behavior would change and we have to adapt to that and we see that our business model is capable of doing it faster than most.”
Cell C, whose largest shareholder is Blue Label Telecoms, said the loss was due to one-time impairments and restructuring costs, including assets worth R5 billion (network assets and right of use) that were impaired as a result. of a new arrangement of the MTN network.
Fin24 previously reported that Telkom confirms that it is in talks to buy Cell C and that the mobile operator was in talks with more than one of the parties about a possible acquisition of the business.
However, in the presentation of results, Stevenson said “… there is no acquisition. Any previous reports on this were speculation. Cell C is planning a recapitalization.”
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