- Mobile virtual network operator Virgin Mobile South Africa has filed for business rescue.
- CEO Zak van der Merwe said the decision comes given the impact of the national lockdown on the business.
- A business rescue plan is expected to be finalised during November 2020.
Mobile virtual network operator Virgin Mobile South Africa has filed for business rescue, as a consequence of the national lockdown, its CEO Zak van der Merwe confirmed.
Virgin Mobile South Africa was launched in 2006. It was a joint venture between Richard Branson's Virgin Group and Cell C. Neither Branson or Virgin Group are shareholders in the company and Cell C also sold its stake in the company as far back as 2011. The company changed ownership in 2019, a spokesperson said.
"The new management team has been focused on stabilising the business and preparing it for the introduction of a new go-to-market strategy.
"Although we were making good progress, the business was already in a vulnerable position when the pandemic hit. Covid-19 has exacerbated the issues we were facing and unfortunately, we have been left with no alternative but to apply for voluntary business rescue in a bid to protect all our stakeholders and to create a structured environment within which the company can safely continue its growth," a statement read.
John Henning, a senior business rescue practitioner and Peter Thompson, a junior practitioner have been appointed as business rescue practitioners. According to Virgin Mobile Ssouth Africa, substantial progress has been made in the process and a business rescue plan is expected to be concluded during November 2020.
"This past year has been an enormously trying time for all South African businesses," said van der Merwe said in a written response to Fin24.
"This process is obviously, a very difficult one for all the stakeholders of our business and as a consequence I’m trying to do my best to ensure that we approach any conversations in this respect with the care and sensitivity that they demand," he said.
"Regardless of the process, we'll continue operations as per normal and our primary focus remains on ensuring that we care for our customers, employees and all of our other stakeholders."