Blue Label at record low as JSE threatens suspension

The share price of Blue Label Telecoms, the largest shareholder of Cell C, fell to a record low on Tuesday after the JSE said it was facing suspension for failing to deliver its financial results.

Blue Label, however, issued a statement reiterating that its results would be released on September 26.

The JSE said on Tuesday that Blue Label had until the end of September to release its results for the year ended May, in order to comply with its three-month posting requirement. 

As of 9.30am, Blue Label's share price was 6.94% lower at R2.68, its lowest since listing, but by 12.15pm had pared its losses and was only down 0.69% to R2.86.

The company's share price has fallen 47.13% so far in 2019, which follows a 63.74% loss in 2018.

Blue Label said earlier in August that it was in the process of determining the value of its investment in Cell C, of which it holds 45%.

Cell C, which has struggled to make consistent profits since it became SA’s third mobile operator in 2001, is grappling with a hefty debt burden.

In August S&P Global Ratings downgraded Cell C’s debt to D, or “default,” its lowest-possible junk rating. This came after the cellphone operator “failed to make interest payments on certain bilateral loan facilities”.

“We believe there is an increased likelihood that Cell C will be unable to repay all or substantially all of the obligations as they come due, unless it is able to restructure its debt and recapitalise its balance sheet,” the ratings agency said at the time.

It remains to be seen if the telecoms operator will be able to meet the September 30 deadline. However, earlier this week, Blue Label issued an official invite to a presentation of the results set for Thursday 26 September. 

gernetzkyk@businesslive.co.za

gavazam@businesslive.co.za