Cell C: The Debt-Stricken Telco That’s Secretly Laughing All the Way to the Bank
Meet Cell C, the mobile operator that’s been on the brink of financial disaster for years. But don’t worry, they’ve got a plan – to trick their shareholders into believing they’re actually turning things around.
According to top executives, Cell C is confident it will have enough cash to settle its massive shareholder debt in the next three to five years. Yeah, right. We’ve heard that one before.
Under CEO Jorge Mendes, the company is undergoing a recapitalization to gain financial independence from its largest shareholder, Blue Label Telecom. But don’t get too excited, folks. This is just a clever ploy to buy more time and avoid paying back the debt.
"We’re not going out looking for money from the shareholders to pay this debt," says CFO El Kope, with a straight face. "We’re fairly confident right now that we will settle." Yeah, confident – like a junkie is confident they’ll quit cold turkey tomorrow.
Cell C’s financials are a mess, with R5-billion in shareholder debt and R2-billion in lease obligations. But hey, they’re "seeing recovery" and "incremental growth" in 2024 prepaid revenue. Who needs actual profits when you can just fudge the numbers and pretend everything is okay?
And let’s not forget the company’s plan to franchise most of its stores and leave only three or four under its control. Because nothing says "recovery" like offloading your liabilities to someone else.
So, Cell C’s executives are confident they’ll pay back their debt. But we’re not buying it. This is just a classic case of debt juggling, and we’re waiting for the inevitable collapse.
Don’t miss: Our expose on Cell C’s network quality improvement, because who needs actual services when you can just tweak your sales channels’ strategy?
