China Mobile is interested in buying South Africa’s struggling third-biggest mobile operator by subscribers, Cell C.
On Sunday, a source with knowledge of the matter told ITWeb – an online technology publication – that talks are taking place between Cell C and China Mobile, saying “a deal is imminent”.
The speculation comes as struggling Cell C continues to drag down the shares of the JSE telecoms group Blue Label Telecoms, which owns almost half of the cellphone group.
Last month, Cell C reported R8 billion net loss, after-tax, for the year ended-May 2019.
As of 31 May 2019, no value was attributed to the underlying value of Cell C and as a consequence thereto the balance of the carrying value of Blue Label’s investment therein, amounting to R2.52 billion was impaired to nil, the JSE-listed company said.
Today, Cell C told ITWeb that the company will engage anyone with the view of turning the company towards viability.
“We cannot comment on behalf of China Mobile who may be in negotiations with various mobile operators around the world.
“Cell C will keep the door open to any conversations that will assist the company’s future viability,” it says.
Blue Label Telecoms, which holds a 45% stake in Cell C, could also not be drawn to discuss the matter.
“We do not comment on speculation,” the company told ITWeb.
Cell C CEO Douglas Craigie Stevenson believes the company still stand a chance to compete and be turned around.
“Our turnaround strategy is focused on ensuring operational efficiencies, restructuring our balance sheet, implementing a revised network strategy, and improving our overall liquidity. Cell C has a real opportunity to address its historical performance through a focus on operations that will restore shareholder value,” he said recently.
Furthermore, on 2 August 2018, Cell C procured R1.4 billion of funding from a consortium of financial institutions for 12 months, secured by airtime to the value of R1.75 billion.
Cell C is also in advanced talks with potential funders, led by the Buffet Consortium, to recapitalise the struggling business and repairing its distressed balance sheet.
