Now Net1 delays results because of Cell C’s woes

Net1 UEPS Technologies has become the second JSE-listed company, after Blue Label Telecoms, to delay publication of financial results because of the ongoing financial woes at Cell C.

Along with Blue Label, Net1 participated in the 2017 recapitalisation of the mobile operator and owns 15% of its equity.

In a statement to shareholders on Tuesday, Net1 said it was rescheduling publication of its audited financial fourth quarter results “in order to allow more time for clarification on various developments in respect of the proposed transactions at Cell C”.

It was doing this, it said, as this information was expected to “significantly impact the carrying value of its Cell C investment as of 30 June 2019”.

“The company will now release fourth quarter and year-end 2019 results after the market close on 26 September 2019.”

It said its fourth quarter numbers would show revenue of about US$70-million, down from $87-million in the third quarter.

On 19 August, Blue Label, which owns 45% of Cell C, said it would delay publication of its full-year numbers, also until 26 September.

‘Will have an impact’

“Blue Label’s audit for the year ended 31 May 2019 is substantially complete. However, the group is currently in the process of determining the valuation of its investment in Cell C, incorporating the effects of the transactions that are currently in progress,” the company said in a statement to shareholders at the time.

“The outcome will have an impact on the carrying value of the investment, the assessment of the remaining fair values of (Blue Label investment vehicles) SPV1 and SPV2 (as detailed in the trading statement published on the stock exchange news service on 22 February 2019) as well as the recoverability of the existing deferred tax asset within Cell C,” it said.

“An extensive process is currently being undertaken by Cell C management in order to perform an assessment of the extent of the impact that the above transactions will have on Cell C’s financial statements, which are currently being finalised.”

In February, Blue Label said the Buffet Consortium, which is led by reclusive billionaire property mogul and businessman Jonathan Beare, planned to buy a minority shareholding in Cell C that would bolster the mobile operator’s balance sheet.

Blue Label concluded a “binding term sheet” with the consortium in terms of which it would become a minority shareholder, pending certain conditions being fulfilled. Discussions toward the implementation of the deal are ongoing, but are proceeding well, both Cell C and Blue Label have said.  — (c) 2019 NewsCentral Media