Cell C and MTN are reportedly developing emergency plans to ensure Cell C subscribers stay connected in the event of the company going bankrupt, according to well-placed industry sources. MyBroadband writes that Cell C is under severe financial pressure and has been forced to delay its debt payments and hire consultants to probe its business practices. The company said: ‘Cell C is actively working on concluding the Buffet Consortium transaction together with a further income-generating deal to restructure the balance sheet to increase liquidity and deliver improved network efficiency and cash flow.’ TeleGeography notes that in February 2019 Buffet Consortium, backed by billionaire Jonathan Beare, agreed to become a minority shareholder in the operator, with Cell C saying at the time that ‘a further detailed announcement will be made once the parties have executed the transaction documents required to give effect to the principles recorded in the binding term sheet’.
In 2017, Cell C emerged from a protracted debt-restructuring rescue plan with Blue Label Telecoms taking a 45% stake in the company for ZAR5.5 billion (USD371 million). The cellco accumulated a debt of ZAR8.9 billion by the end of 2018, ZAR2.9 billion short of the forecasts expected by its majority shareholder, Blue Label Telecoms, which was aiming to have reduced Cell C’s debt by ZAR20 billion to ZAR6 billion when the recapitalisation of the telecoms company was finalised in August 2017.