Larry Nestadt, chairman of Blue Label Telecoms, shed light on why the telecoms company’s shares are being hammered by the market.
Shares of Blue Label Telecoms have been tanking and the stock has lost two-thirds of its value in the past year.
“The board and I are naturally concerned about the decline in the share price, which we believe is largely attributable to uncertainty with respect to Cell C’s turnaround strategy, current debt levels and requirements for further funding,”
“These concerns will be largely negated on the proviso that Cell C delivers on its business plan.”
In this regard, Nestadt added that it is Blue Label Telecoms intention to monitor and assist on a diligent basis and to communicate the results thereof on a more detailed basis going forward.
Blue Label Telecoms acquired 45% of Cell C.
It is yet to benefit from an upside it saw when it entered into a
“We trust that our improved Cell C disclosure will build greater confidence in support of our strategy to ensure positive cash flow generation and in turn enhance the core business of Blue Label,” said Nestadt.
Recently, Cell C reported a net loss of R645 million in the six months to end-June – an improvement of 33% compared to the R968 million net loss in 2017.
Blue Label is planning to list Cell C on the JSE in 2020.
While Cell C is planning to be listed on the JSE it seems not to believe in transparency.
As a company 60% owned by JSE-listed companies, you’d think Cell C could be a bit more transparent, argued Financial Mail. “For a company talking bodly about listing on the JSE next year or in 2020, its shoddy level of transparency suggests it’s nowhere near ready.”
However, Nestadt stated in the annual report that governance across all the companies is a key integration focus, especially at Cell C, given the need to improve its financial performance.