Virgin Mobile SA enters business rescue due to COVID-19
Virgin Mobile South Africa, the longstanding mobile virtual network operator (MVNO) that runs on Cell C’s network, has entered business rescue.
In response to questions from MyBroadband, Virgin Mobile SA confirmed that it has begun a voluntary business rescue process, stating that its vulnerable financial position could not bear the demands of the COVID-19 pandemic.
“Virgin Mobile South Africa has been proud to connect people across South Africa for the past fourteen years,” a Virgin Mobile SA spokesperson said.
“Ownership of the business changed hands in 2019 – neither Richard Branson nor the Virgin Group are shareholders in the company – and the new management team has been focused on stabilizing the business and preparing it for the introduction of a new go-to-market strategy.”
It said it was making good progress, but could not continue under the economic constraints of the pandemic and subsequent national lockdown.
Hit by the pandemic
Although we were making good progress, the business was already in a vulnerable position when the pandemic hit,” Virgin Mobile SA said.
“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.”
“We are doing all that we can to find a way forward for our company and the business rescue process offers protection for our customers and employees – who remain our absolute priority,” Virgin Mobile SA said.
The company has appointed senior business rescue practitioner John Henning and junior practitioner Peter Thompson as its business rescue practitioners, and they have been working with all the company’s stakeholders to formulate a business rescue plan and lead the process going forward.
“We’ve already made substantial progress in this respect and hope to conclude an approved business rescue plan during November 2020,” the company said.
It is unclear how customers will be affected or whether a component of the MVNO’s business rescue plan would be to move to MTN’s recently launched MVNO service, provided it offers better value than Cell C’s.
Loading ...