Cell C recently published an open letter stating that the company would implement a new business plan to improve its current position.
CEO Douglas Craigie Stevenson said in the letter that the company faces financial and other challenges, and will implement a new business plan which will simplify its business model.
“We have implemented significant austerity measures and have cut costs which do not contribute to revenue-generating activities, including a review of all contracts to ensure alignment with business priorities and a hiring freeze,” he said.
“I want to emphasise that Cell C is strategically positioning itself and we are using our best efforts to be a strong participant in the industry, I firmly believe we are on the right track.”
Blue Label Statement
Following the publication of this letter, the share price of Blue Label Telecoms – Cell C’s biggest investor – has plummeted by just under 10% as investors grow concerned over the state of the mobile operator.
Blue Label Telecoms has published an announcement attempting to placate investors in the wake of the Cell C letter, stating that “no material concerns or issues have been uncovered as a result of Cell C’s new management”.
“In anticipation of the transaction resolving the liquidity position at Cell C, and launching the new, improved operating model, Cell C’s management and board are ensuring that Cell C is sufficiently geared to run the business as required,” Blue Label Telecoms stated.
“Blue Label and the Buffet Consortium are fully apprised of Cell C’s drive to effectively and efficiently utilise all of its network, technology and human capital assets, and are supportive of management’s initiatives.”
Blue Label said it is looking forward to advising shareholders on the progress of transactions, which it said are currently at an advanced stage.