- Cell C said it is focusing on recapitalisation and any mention of the sale of Cell C was just speculation.
- According to Cell C's CFO the company has a balance sheet problem, due to legacy debt they have incurred, and not a financial statement problem.
- Over 500 jobs are to be shed as the mobile operator closes brick and mortar stores.
Struggling mobile operator, Cell C, plans on more than halving its retail store footprint to 128 stores from 240 and cutting as much as 546 jobs after reporting a loss of R7.5 billion for its six months to end-June.
"We've phased store closures because we are required to conserve cash," Craigie Stevenson, CEO of Cell C, said at a results presentation on Tuesday.
He said they needed to redesign their retail model and a redesign of the way they go to market with their product. "It is the future of where we will be putting ourselves as a network. It simply doesn't make sense anymore, if you look at the current business model, to continue building stores.
"We never envisaged a black swan event like Covid-19 coming along and the way consumer behaviour would change and we have to adapt to that and we see our business model as being able to do that quicker than most.”
Cell C, whose biggest shareholder is Blue Label Telecoms, said the loss was due to a once-off impairments and restructuring costs, including R5 billion worth of assets (network and right-of-use assets) that were impaired as a result of a new MTN network arrangement.
Fin24 previously reported that Telkom confirms it is in talks to buy Cell C and that the mobile operator was in discussions with more than one party over a potential acquisition of the business.
However at the results presentation, Stevenson said "...there is no acquisition. Any previous reports in this regard were speculation. Cell C is planning a recapitalisation."