Blue Label bet big on Cell C — and lost big

Blue Label’s journey with Cell C started in August 2017 when its wholly-owned subsidiary, The Prepaid Company, acquired a 45% stake in the mobile operator for R5.5 billion.

Unfortunately, the critics were right. Cell C’s financial and operational problems continued, and it had to shut down Black because of poor performance. Although Blue Label impaired its investment in Cell C to nil, the mobile operator remains important to the company. However, Blue Label makes a much larger margin on airtime sales from Cell C, which makes it a significant contributor to profits despite low volumes.

The debtors voted in favour of the debt restructuring, which saw secured lenders accepting a 20c claim to the rand. To further assist Cell C with working capital, TPC will purchase R2.4 billion in prepaid airtime from Cell C.

Source: News Formal (newsformal.com)

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