JSE-listed Blue Label Telecoms has tried to reassure the market after its share price plummeted by more than 7.43% to close at R2.74 a share on Thursday.
At 15:58, the share price was down 1.47% at R2.68 and the stock has tumbled 23% in the past seven days. For more read: Blue Label Telecoms Shares Continue to Tank as Tough Week Continues for Cell C
The company, which owns half of the ailing Cell C, referred investors to the announcement by the mobile phone operator in which S&P Global Rating published a report downgrading Cell C to D (Default).
Blue Label Telecoms wanted to reassure investors that Cell C is dealing with its challenges.
In response to the downgrade, Cell C said, “the suspension of interest payments in July is part of its wider initiatives to improve liquidity and to restructure the company’s balance sheet.”
Blue Label Telecoms said Cell C “continues to work proactively with all stakeholders to improve its liquidity, debt profile and long-term competitiveness as part of its strategic roadmap.”
The JSE-listed company also reminded its investors that Cell C has “entered into a term sheet to expand the provisions of its roaming agreement with MTN, to better control its capital expenditure and operating costs.”
“The roaming agreement together with the recapitalisation transaction will assist it to achieve sustainability.”
It added that Cell C said: “An agreement will lay the groundwork for a broader national roaming agreement, supporting South Africa’s policy goals of avoiding network duplication.”
The company said, “Cell C engaged with S&P throughout the process and are of the belief that they are on the right track with the transactions currently being finalised.”
Meanwhile last week, Blue Label Telecoms delayed the publication of its 2019 financial statements to evaluate its investment in Cell C.
At the time, the company informed investors that the delay is due to various issues related to Cell C.
The company informed investors that its financial results for the year ended 31 May 2019 will be released on SENS on 26 September 2019. The results had been expected to publish later this month.