Cell C defaults on loans of R3.16bn

By Dineo Faku for IOL

Blue Label yesterday notified its shareholders that troubled Cell C had defaulted on its loans.

The JSE-listed telecoms group, which holds 45% of Cell C, said the country’s third-largest mobile telecoms provider had failed to make payments of capital on its $184million (R3.16billion) note, which was due on Sunday, and interest and capital repayments related to the respective bilateral loan facilities between Cell C and Nedbank, the China Development Bank Corporation, the Development Bank of Southern Africa and the Industrial and Commercial Bank of China, which were due in January and last month.

Blue Label said note holders were aware that Cell C was working on its liquidity crisis.

“Currently, none of the bilateral loan facilities has been accelerated, as note holders are aware, and support that Cell C is committed to resolving the situation by agreeing to restructure terms with its lenders while it also continues to work pro-actively with all stakeholders to improve its liquidity, debt profile and long-term competitiveness,” said Blue Label.

Cell C said the loan defaults came as no surprise, because its informal debt was at a standstill until its recapitalisation programme was finalised.

“Cell C continues to work pro-actively with all stakeholders to improve its liquidity, debt profile and long-term competitiveness as part of its turnaround strategy,” the company said.

Cell C said its turnaround strategy was focused on ensuring operational efficiencies, restructuring its balance sheet, implementing a revised network strategy and improving overall liquidity.

“While a new recapitalisation is being negotiated, there is an informal debt standstill and debt payments have been suspended,” said the company.

It said that although Cell C’s lenders were entitled to call up the entire debt owed, they had not accelerated debt payments and had held off on taking action in order to facilitate a commercial solution.

“The non-payment is not a surprise to lenders that understand the Cell C turnaround strategy.”

The company said its S&P Global status on certain loan facilities and senior secured bonds remained unchanged at D (default).

Ofentse Dazela, director of pricing research at Africa Analysis, said the default showed that the company’s expanded roaming agreement with MTN, which was touted as some sort of panacea, had not yielded the intended results.

Dazela said the operator continued to navigate a challenging environment and questions about its sustainability were becoming more pronounced by the minute.

New WhatsApp feature to debunk fake news

By Marco Cocomello for Glitched

WhatsApp is releasing a new feature that lets users quickly search the contents of a viral message to fact-check for fake news. The company announced that starting today, a magnifying glass icon will appear next to messages that have been forwarded through a chain of more than five people. Tapping this icon searches the message’s contents online and will reveal any common conspiracy theories or fake information the message may hide.

WhatsApp claims this new search feature uses advanced algorithms to help debunk any fake news you may receive. The company shared an example of a message sent to users claiming that “drinking freshly boiled garlic water will cure COVID-19”. The magnifying glass search brings up three fact-checking websites which flag the claim as fake news.

If privacy is your concern then don’t worry. WhatsApp claims that the feature works by allowing users to upload the message via their browser. In addition, WhatsApp never sees the message itself. It is simply directed towards fact-checking sites. The search works the same way a private browsing session would.

The new WhatsApp fact-checking feature is rolling out today. It may take some time to arrive in SA. So far, the feature is available in Brazil, Italy, Ireland, Mexico, Spain, the UK and the US. Users need to update their app in order to make use of the new feature. Keep in mind that the magnifying icon will not appear unless that said text has been forwarded to more than five people.

This new feature is just another step Facebook is taking to prevent false information spreading through the app. Earlier this year, WhatsApp announced it would limit the number of people you can forward texts to. This was also to help stop the spread of fake news. It is unclear whether or not the change helped in any way.

By Jamie McKane for MyBroadband

The global COVID-19 pandemic and national lockdowns implemented by various countries have resulted in an explosion in broadband usage as more people work from home than ever before.

ISPs and infrastructure providers have had to adapt to this rapid shift in broadband traffic.

South African fibre networks, for example, provided customers with up to double their fibre line speeds through their Internet Service Providers (ISPs).

As a result of these lockdowns implemented around the world, the average broadband speed of many countries decreased substantially as networks struggled to meet the demand.

Cable.co.uk has published a report comparing average download speeds during national lockdowns around the world, factoring in the stringency of the lockdowns implemented in each country.

The research combined data from OxCGRT’s stringency index, which tracks government lockdown measures that specifically limit the behaviour of populations, with data from over 364 million broadband speed tests courtesy of M-Lab.

The region where broadband speeds dropped the most during lockdown was Central America, with an average drop of 26.03%.

“Only one of the six countries qualifying in this region experienced a rise (Costa Rica at +0.82%),” Cable.co.uk said.

“Meanwhile, Panama (-48.99%), Guatemala (-14.30%), Honduras (-3.69%), Mexico (-2.35%), and El Salvador (-0.01%) all experienced drops in speed of varying severity.”

South Africa broadband speed drop
South Africa saw a marginal average broadband speed drop of just over 5% during the period from 18 March to 30 June 2020, according to the report.

This was in line with other countries in Sub-Saharan Africa, apart from Angola, which saw a significant increase of 117.19%.

It should be noted that a number of African countries were excluded from this comparison due to their lack of inclusion in the OxCGRT stringency index or their insufficient number of tests.

South Africa’s statistics are summarised below:

  • Average broadband speed change: -5.48%
  • Mean lockdown stringency: 57.31
  • Number of speed tests: 7,074,978
  • Average download speed during lockdown: 14.85Mbps
  • Average download speed outside of lockdown: 15.71Mbps
  • In Sub-Saharan Africa, 13 of the 14 qualifying countries recorded drops in measured internet speeds during their lockdown periods, with an average decrease of -14.24%.

“Angola bucked the trend in the region, showing a surprising increase of 117.19% during its lockdown period,” the report said.

“Meanwhile, Madagascar (-37.71%), Cote d’Ivoire (-30.77%), Ghana (-24.58%), and Nigeria (-20.84%) experienced the largest drops in measured speeds during their respective lockdowns.”

Cable.co.uk consumer telecoms analyst Dan Howdle said that they measured an average global broadband speed drop of 6.31%, which is a significant departure from the normal trend.

“Our annual global broadband speed tracker has demonstrated global increases of around 20% year-on-year since 2017,” Howdle said.

“For the majority of countries in this study to be moving in the opposite direction during their COVID-19 lockdowns, then, is all the more significant.”

“While it is impossible to attribute direct causality, our study shows a high correlation between lockdown periods around the world and dips in measured internet speeds, with some regions of the world measuring the most substantial drops, and others more or less unchanged,” Howdle said.

Source: TGS

“It takes a lifetime to build a good reputation, but you can lose it in a minute” (Will Rogers)

Whilst many employees enjoy working from home, this is a time of uncertainty for them. They read of people being retrenched or furloughed and wonder if they are next. The isolation of working from home can fuel this uncertainty.

Yet it is these employees who daily interact with customers and other stakeholders. If staff have negative feelings about the company, this can be quickly picked up by customers. Social media can spread this quickly and suddenly management have to start undertaking damage control. Recently, an English business decided to not pay staff until the government’s wage subsidy kicked in. Following an outcry, management swiftly reversed this and paid the staff.

Contrast this with Quickbooks who kept their cleaning staff on full pay despite empty offices. L’Oreal have made a point of paying small suppliers quicker than usual.

Don’t think short term

The decisions you make send out signals to your staff and they are much more likely to view you favourably if you are showing fairness to your stakeholders.

Think also of your investors – they tend to support businesses where carefully considered long-term decisions are made by management. Don’t forget having a holistic outlook and making the environmental, social and governance (ESG) criteria part of your strategies.

Communicate effectively

In a recent case, staff supported management putting them on furlough after they were persuaded by management that this was the best long-term strategy to preserve jobs in the business.

Staff are more motivated if they know they have commitment and active support from their bosses.

IBM have started a program of supporting employees who need to take out time to educate their children or look after family members. They have also encouraged their staff to raise any individual difficulties they have with their managers. Introducing this type of flexibility makes managers’ jobs harder to do and IBM have created separate online chat channels for managers to network with their peers and find solutions to employees’ problems.

Other companies with diversity in the workplace have openly supported Black Lives Matter and have made sure that when there are pay cuts or retrenchments, there is no discrimination against minorities.

The world has changed and become more uncertain and more flexible. You need to plan carefully and act to ensure you stay on top of the situation and keep the support of your staff.

 

In addition to the inevitable jobs and livelihoods lost due to the Government’s ban on alcohol, South Africa has also lost R13.3-billion in investments.

SAB

  • SAB has put R5-billion worth of capital investment projects on ice
  • South Africa’s largest brewery is cancelling R2.5-billion in investment for 2020
  • An additional R2.5-billion in investment is being reviewed for 2021, due to the ban
  •  Distell has said that the industry had already lost 118 000 jobs, and projections showed that a nine-week ban now would cost another 84 000 livelihoods
  •  The tax loss from the first six-week ban on alcohol sales came to R15.4-billion
  • If the current ban remains in place for nine weeks, another R13-billion would be lost

Consol

  • Glassmaker Consol has suspended construction of a R1.5-billion glass manufacturing plant that it was due to build in Erkhuleni, Gauteng
  • In additon, Consol has halted R800-million worth of furnace upgrades
  • Consol maintains that the alcoholic beverages industry accounts for about 85% of glass sales, and that the South African glass industry will see a 15% decline over the next 12 months
  • The new manufacturing plant would have added 130 000 tons of glass production to Consol Glass’s capacity
  • It was anticipated to create 120 direct job and approximately 2 600 additional employment opportunities across the value chain

Heineken

  • Heineken, the world’s second-largest beer brewer, has shelved R6-billion in planned investment
  • A new brewery was to be built on the KwaZulu-Natal north coast
  • It was expected to create more than 400 permanent jobs

Source: Supermarket & Retailer 

More than 1 400 staff members at Pick n Pay have taken voluntary severance packages since March, the retailer has said in a trading update.

The Cape Town-based group’s voluntary severance programme (VSP) offers staff 1.5 weeks of pay per completed year of service, plus four weeks of notice pay.

According to the group, its objective is to reduce employee costs.

The group said the cost of the compensation payments to departing employees will be borne in the first half of the current financial year.

Pick n Pay said it expects the programme to be cost neutral for the full financial year, as compensation packages will be fully recouped through cost savings.

“In subsequent years, the reduction in employee numbers will have a positive impact on the operating costs of the group. Alongside other strategic actions designed to improve the Group’s performance, the VSP is a major step forward in making the business more competitive and more sustainable” the update read.

The group is projecting that its headline earnings per share for the 26 weeks to end August 2020 will be down by more than 50% as it grapples with the effects of Covid-19 on its business. This excludes the impact from hyperinflation accounting in Zimbabwe.

“I want shareholders to understand and be reassured that the impact on our first-half earnings that we are announcing today derives solely from the specific circumstances of the pandemic, the impact of measures taken by government and ourselves to mitigate it, and the once-off costs of our VSP which has made the Group leaner and more competitive,”said Richard Brasher, CEO of Pick n Pay, in the statement.

Source: De Bruyn Daly

Driving licence test centres were closed during the lockdown and even prior to that centres were running behind in renewing driver’s licences and testing first time driver’s licence applicants.

The Minister of Transport recognised these difficulties and gave motorists until August 31 to renew their licences. That has now been extended to January 31 2021 and your licence is deemed to be valid if it expired during the period from March 26 to August 31.

Check your insurance

Insurance policies require you to have a valid driver’s licence and if this is not the case, the insurer is entitled to refuse any claim made. Even if your policy doesn’t specifically require a valid driver’s licence, there could still be difficulties in making a claim without a valid licence.

It is worth contacting your insurance broker or company and getting written clarification of cover if your licence has expired or will expire this year.

Car hire

On a related topic, car hire companies will not allow car hire without a valid driver’s licence – check upfront that your “deemed valid” licence will be accepted. And as and when international travel becomes available to us again, remember that your destination country may still regard your expired licence as invalid.

Motor vehicle licence discs

All motor vehicle licence discs, temporary permits, and roadworthy certificates that expired during the period from March 26 to May 31 are deemed valid until August 31 2020.

By Carin Smith for Fin24

Two main trends have emerged regarding consumer debt levels in South Africa, according to the latest DebtBusters’ debt index for the second quarter of 2020 released on Monday.

Firstly, the index reveals a real-term decline in net incomes and secondly, consumers are supplementing this by increased unsecured lending.

“As a result of lack of growth in their net incomes, consumers find themselves in a corner and have been borrowing heavily, especially using unsecured loans, to make up the shortfall,” said Benay Sager, DebtBusters’ chief operating officer, in a statement.

Bigger earnings, bigger debt

Higher-income earners in South Africa in particular appear to have come under significant debt pressure, according to the debt index for the second quarter of 2020.

The increase in unsecured debt is, on average, 18% higher than it was four years ago. For consumers earning more than R10 000 per month, unsecured debt is 31% higher – for those earning R20 000 or more per month, unsecured debt levels are 42% higher than 2016 levels.

Consumers earning R20 000 or more a month had an unsustainable debt-to-income ratio of 138%. This is 12% more than during the same period in 2016.

The quarterly analysis by DebtBusters has been tracking client trends over the past four years.

“Although it’s impossible to determine the full impact of the hard lockdown based on just one quarter, the four-year-trend shows that for most consumers, debt levels are steadily increasing,” says Sager.

“This is because nominal incomes have been flat, so in real terms people have less income than in 2016, as inflation over the same period has been around 20% cumulatively.”

According to Berniece Hieckmann, head of GetUp, a new offering from financial services provider Metropolitan that includes debt consolidation and income protection, the backdrop of SA’s existing socio-economic landscape means the Covid-19 pandemic has the potential to financially cripple a generation of young South Africans at the very start of their professional journeys.

She points out that, while Covid-19 has had a devastating impact on the global population, young people, in particular, are anticipated to be one of the most significant casualties of the pandemic.

According to the International Labour Organisation (ILO), past recessions have shown that young individuals are usually first to be laid off work, while three out of four work in the informal economy, with little or no social protection. In addition, youth are over-represented in sectors ravaged by the pandemic, such as hospitality, retail and tourism.

“Our research revealed that debt is the lived reality of many millennials. As the financial burden on them increases, so is debt expected to mount – creating a trap that they may struggle to escape,” says Hieckmann.

Chief executive of FNB Easy, Philani Potwana, says to alleviate financial pressures, consumers should fully utilise the free benefits they receive from their banks. These benefits could free up much needed cash in consumers’ wallets, if taken advantage of.

These free benefits could include free cash withdrawals; prepaid airtime for free; free “send money” transactions; free card swipes; free app usage; free data, voice minutes and SMSs; free medical, legal and financial advice.

“Despite the prevailing challenges, we believe there’s an opportunity for all customers to get maximum value from their banking relationship,” says Potwana.

According to Investec chief economist Annabel Bishop, the lagged effect of the very severe lockdown the SA economy has experienced this year has started to come through in the data. The number of individuals losing their salaries over June fell by -20.7% year-on-year, according to the latest BankservAfrica data, while May saw a figure closer to -14% y/y and April around only -1.0% y/y.

The BankservAfrica Take-home Index (BTPI) records the majority of payments from large corporates and a fair number of medium-sized firms that are served by payroll service providers and firm-owned payroll administrators. Bishop points out that the recent decrease of the index may, therefore, not reflect the full impact of salary declines on small firms.

“In South Africa, state subsidies to low income earners have assisted households, and many high income earners and savers have managed to subsist on savings, but the middle income band has been severely affected, with many sliding into poverty, in turn contributing to further severe weakening in economic activity as demand has reduced,” says Bishop.

“The private sector is seeing markedly lower levels of renumeration overall this year compared to last year, while civil servants do not see this collapse, managing to avoid their salaries being reduced by and large, and instead even having agitated via unions for higher levels of renumeration despite the collapse in government’s tax revenues this year.”

Return-to-school plan outlined by DBE

The Department of Basic Education published the amended school calendar for 2020 on 2 August 2020.

All public schools will break from 27 July 2020 and the school arrangements after the break are as follows:

School arrangements after break

27 – 31 Jul 2020 – The principal and the School Management Team will determine the staffing requirements to ensure compliance with the health, safety and social distancing requirements and to assist with the distribution of learning material and the roll out of the daily school feeding programme for all qualifying learners.
– The principal and the School Management Team must be on duty to make arrangements for the receipt of the learners anticipated in the weeks ahead.
– Schools will remain open for feeding of qualifying learners in terms of the National School Nutrition Programme.

3 – 7 Aug 2020 – Grade 12 and Schools of Skill: Year 4 learners will return to school on 3 August 2020.
– Grade 12 and Schools of Skill: Year 4 teachers (and teacher support staff) will return to school on 3 August 2020.
– The principal and the School Management Team (as required) will be in attendance at school.
– Officials (as identified by the principal and the School Management Team) will return to school on 3 August 2020, to assist in ensuring compliance with the health, safety and social distancing requirements and to assist in the distribution of learning material and the roll-out of the daily school feeding programme for all qualifying learners.

11–14 Aug 2020 – Grade 7 learners will return to school on 11 August 2020.
– Grade 7 officials (and teacher support staff) will return to school on 11 August 2020.
– The principal and the School Management Team (as required) will be in attendance at school.
– Officials, who are at school, will assist in ensuring compliance with the health, safety and social distancing requirements and to assist in the distribution of learning material and the roll-out of the daily school feeding programme for all qualifying learners.

17– 21 Aug 2020 – All officials will report for duty on 17 August 2020 to prepare for the return of learners in the remaining grades.
– Grade 7; Grade 12; and Schools of Skill: Year 4 learners and officials will already be at school.
– Officials who are already at school will assist in ensuring compliance with the health, safety and social distancing requirements and to assist in the distribution of learning material and the roll-out of the daily school feeding programme for all qualifying learners.

24 Aug 2020
(a) Learners in the following grades, years or schools will return to school on 24 August 2020:
– Grade R; Grade 1; Grade 2; Grade 3; Grade 4; and Grade 6;
-Grade 9; Grade 10; and Grade 11;
– Schools of Skill: Year 1; Year 2; and Year 3;
– Schools with Learners with Severe and Profound Intellectual Disabilities (“LSPID”): Year 1; Year 2; and Year 3;
– Schools for Learners with Severe Intellectual Disabilities (“SID”): Grade R; Grade 1; Grade 2; Grade 3; and final year (Occupational); and
– Schools with autistic learners: Junior group (below 13 years); Senior Group (13 years and above); and final year (18 years and above).

(b) The school must ensure compliance with the health, safety and social distancing requirements in accommodating this group of learners.

31 Aug 2020: Learners in the following grades or schools will return to school on 31 August 2020:

  • Grade 5 and Grade 8; and
  • Schools for Learners with Severe Intellectual Disabilities (“SID”): Grade 4 and Grade 5.

Beware this uncapped data scam

By Hanno Labuschagne for MyBroadband

Mobile users in South Africa should be wary of scammers claiming to offer data or airtime packages at suspiciously low prices.

An online-based scam which claimed to sell unlimited prepaid data, voice calls, and messaging bundles was recently pointed out by MyBroadband Forum members.

A party calling itself “Unlimited Prepaid Bundles” was selling several mobile products which it claimed worked on Vodacom, MTN, Cell C, and Telkom’s networks.

The scammers had also taken out sponsored ads on Facebook for these “unlimited” bundles.

Upon visiting the Facebook page for “Unlimited Prepaid Bundles”, we discovered several early warning signs of trouble.

The first was the suspiciously low pricing of the bundles, which included an uncapped monthly data bundle at R249 and yearly uncapped data at R799.

After MyBroadband lodged these queries, the Facebook page and website of the scammers were taken down.

MyBroadband notified African Bank of the site and provided the details of the bank account which was being used to scam buyers. The bank confirmed it had launched a forensic investigation into the account.

Follow us on social media: 

               

View our magazine archives: 

                       


My Office News Ⓒ 2017 - Designed by A Collective


SUBSCRIBE TO OUR NEWSLETTER
Top