According to a recent MyBroadband article, Cell C is in deep financial trouble, and was “forced to delay its debt payments and hire consultants to probe its business practices”.
Cell C’s interim CEO, Douglas Craigie Stevenson, wrote an open letter detailing the challenges faced by the company. The letter included a turnaround strategy, aimed at “extracting greater value from its roaming agreement and optimising its network revenue and usage”. A recapitalisation programme is also on the cards.
Bowmans Attorneys have been hired to “investigate any parts of the business where we suspect that there may be irregular business practices”.
A sharp decline in Cell C shareholder Blue Label Telecoms’ share price followed this announcement.
According to MyBroadband, they have “received information from industry insiders saying Cell C is facing tremendous financial challenges which are big enough to bankrupt the company”, with some speculating the company may “close down and have its parts sold off”.
According to Stevenson’s open letter, the challenges faced are the following:
- Debt – this has gone up more than anticipated since the recapitalisation of 2017
- The cost of debt – Cell C is paying a substantial premium on the cost of its debt
- Liquidity problems – this is due to some of the events around the payment of large tranches on coupons
- Poor business performance – Cell C’s business performance has not been optimal
Industry insiders told MyBroadband that Cell C is in this position because of:
- High interconnect rates – the interconnect rate went from 20c to R1.25 before Cell C’s launch, which made it nearly impossible to compete
- Bad management and shareholders – the company was not run efficiently enough to become successful
- Declining voice revenues – as data products become more popular, high-margin voice traffic is declining
- High roaming charges – Cell C pays high roaming charges in areas where it does not have network coverage
Image credit: Tech Central
By Jenni Evans for News24
Johannesburg mayor Herman Mashaba is seeking an urgent meeting with the Eskom board over the power utility’s declaration that it will no longer do repairs in places illegally connected to the power grid.
This follows a meeting between Mashaba and Eskom officials on Monday to deal with complaints by Soweto residents about illegal electricity connections, vandalised infrastructure and extended blackouts.
“Due to the complex nature of the issues discussed between myself and the Eskom team, during a meeting at Megawatt Park, it was decided that it would be prudent to include the Eskom board in our deliberations,” said Mashaba in a statement.
“I have therefore requested an urgent meeting with the board of Eskom and its shareholder within the next 24 hours. The team at Eskom has indeed committed to ensuring this does take place.”
Mashaba felt it was important for the city and Eskom to work together to find solutions to issues faced by Sowetans and other residents affected by ongoing blackouts arising from Eksom’s credit management processes.
Last week Eskom threatened that it will not repair infrastructure in areas where there are illegal connections or the safety of staff cannot be guaranteed.
“Eskom will only restore supply to legal and paying customers in the areas, on condition that the community allows safe access to Eskom staff to conduct audits and remove illegal connections,” the statement said.
It was previously reported that Soweto has been ranked as one of the top defaulters in the country, where residents owe Eskom more than R17bn.
Mashaba said last week after Eskom’s warning that he felt compelled to intervene on behalf of residents who will be affected by the actions of a few.
According to the latest Old Mutual Savings & Investment Monitor report, South African households remain under pressure.
The report is based on 1 000 household interviews among working South Africans living in major metropolitan areas, and shows how consumers are being forced to tighten their belts.
- A need to to cut back on monthly spending just to make it to the next payday
- An increase in households under financial stress
- Middle- and upper-income households are showing strain
- 42% of respondents said they struggle to make ends meet each month
- 73% of respondents said they are constantly worried about having enough money
- 58% of respondents said they do not feel financially secure enough to cover an unplanned emergency
- 60% of respondents do not feel confident that government will be able to provide for them and their families if they cannot do it themselves
- Consumers are cutting back on expensive food and clothing purchases
- Households are cutting back on entertainment and entertaining, reducing how often they go out, or have friends and family over for a social gathering
- 15% of people indicate they will cutting back on using domestic workers
- 79% of households indicated they do not employ a domestic worker at all
GBC, ACCO’s global leading laminating and binding brand, is launching the world’s first automatic laminator: the GBC Foton 30.
For the first time, users will be able to load a laminator with up to 30 sheets of paper, press run, and leave the machine to produce high-quality laminated output time after time, every time. Load – Press – Done. It’s as simple as that.
This game-changing development brings roll film lamination in a unique cartridge format and combines it with Auto Feed paper technology to simplify and speed up the traditionally complex lamination process. Simply load a document into the Auto Feed paper tray as you would a printer. There is no need to manually insert the document into a pouch; the innovative Foton 30 processes the document applying the lamination film automatically. It’s perfect lamination without a pouch.
Fully automated, with no manual intervention required and no misfeeds, the GBC Foton 30’s internally heated four roller system produces a high-quality laminated document. It’s advanced sensors automatically detects the document and film thickness, for perfect results.
Other ground-breaking features include an integrated deskew system to ensure jam free lamination with perfect positioning and borders; a feeder sensor detects leading and trailing edges for perfect document trimming.
The GBC Foton 30 is highly versatile, with three operating modes: From fully automatic to manual feed and manual cut, great for non-standard sized paper including small odd shapes up to large banners.
Finally, the user experience of the GBC Foton 30 includes a comprehensive range of features and indicators. Cartridge installation is simple and fool proof, while the ‘Auto Shutoff’ function saves energy. The ‘Ready’ and ‘Warming up’ indicator and the ‘Film Low/ Empty’ warning light ensure an efficient operation.
Ideal for users with high-volume lamination requirements, the GBC Foton 30 will be the largest product launch in the lamination category since carrier free laminators were launched by GBC in the 1990’s. Bill Bayley, Managing Director of Rexel Office Products, says: “The Foton 30 is the most significant new product in the lamination category for well over a decade. GBC remains focused on driving innovative, high-quality and dependable products for the lamination and binding category.”
According to the 2019 South African Wealth Report by New World Wealth, South Africa’s richest people are:
- Diamond magnate Nicky Oppenheimer, with a net worth of $7.3 billion
- Luxury goods boss Johann Rupert, with a net worth of $5.5 billion
- Mining and minerals tycoon Patrice Motsepe, with a net worth of $2.4 billion
- Media mogul Koos Bekker, with a net worth of $2.3 billion
- Capitec founder Michiel le Roux, with a net worth of $1.2 billion
Here are some stats on the wealthy, as per The Citizen:
- South Africa has 40 000 dollar millionaires
- There are five dollar billionaires living in the country
- Nine more dollar billionaires were born in SA but no longer live here, such as Douw Steyn
- 16 600 dollar millionaire call Johannesburg home
- Total private wealth held by people in SA totals $649-billion
- SA is the 31st largest wealth market in the world
- There are about 2 200 homes in South Africa valued at more than R20-million – and Johannesburg and Cape Town have 900 of them
- The most expensive streets in the country are in Cape Town, with property fetching R90 000 a square metre
- Financial and professional services (30%), real estate (16%) and tech and telecoms (9%) account for the sectors where the rich made their money
- The most lucrative university degrees in terms of percentages of high net-worth individuals (HNWIs) are law (28%), finance and economics (19%) and accounting (9%)
- An estimated 3 000 HNWIs have emigrated from South Africa in the past 10 years
Minister of Finance Tito Mboweni took to Twitter on Thursday to oppose Gauteng premier David Makhura’s views that the e-toll system should be scrapped.
David Makhura said in a speech that “our position has not changed. We remain determined that e-tolls are not part of the future of our province.” He went as far as saying that the provincial government was prepared to pay some of the money owed by motorists to ensure the tolling system was scrapped.
Mboweni fired off a series of tweets saying that there should have been a plan at the introduction of e-tolls to ensure the system worked and yielded returns in the long term.
Mboweni incited public ire when he tweeted “I don’t know why the middle and upper classes in Gauteng want to complicate our lives. The working class do not pay e-tolls!! Public transport! Hello…”. Motorists and public transport users disagreed with the sentiment.
Transport Minister Fikile Mbalula waded in, saying President Cyril Ramaphosa instructed that a meeting be held to discuss a way forward, rather than debating the matter over Twitter.
South African consumers will experience their first price drop at the pumps in six months as the price of fuel decreases by nearly a rand today.
Petrol 95 will fall by 95 cents a litre and 93 octane by 96 cents, while diesel (0.05% sulphur) will decrease by 74 cents and diesel (0.005% sulphur) by 75 c/l.
However, analysts are pointing out that consumers will have little to celebrate as electricity tariffs hikes kicked in on 1 July.
Despite the fact that the average car will cos R30 to R40 less to fill, consumers are unlikely to achieve much relief.
- Bus and taxi fares are unlikely to go down
- Electricity tariffs are increasing
- The petrol price decrease only accounts for about R2.50 for every R1 000 people have
Pay insecurity is on the rise amongst state-owned enterprises and municipalities as it seems the government is running out of money.
A recent Business Tech article illustrates this, listing the likes of Denel, Metrorail, Prasa and the SABC as not having paid staff on time.
Municipalities in trouble
- 30 municipalities in the country have not paid employees due to lack of funds
- Employees at the Amahlati municipality in the Eastern Cape were last paid in April
- The latest report from the auditor general showed a shocking decline in the state of the country’s municipalities over the last year
- 257 municipalities and 21 municipal entities were audited for the 2017-18 financial year
- 63 municipalities regressed
- 22 improved improved
- Only 18 municipalities obtained a clean audit by producing quality financial statements and performance reports, as well as complying with all key legislation
A large portion of South Africa’s state companies are currently heavily reliant on the state for bailouts.
- The SABC is currently waiting on government approval of a R3.2-billion bailout
- Eskom has a R69-billion guaranteed pledge from the government coming in over the next three years
- SAA needed over R21-billion from government to fully implement its turnaround strategy, but had to turn to private funding after the government could not meet its needs.
In February, the Soweto debt was sitting at R17-billion in unpaid electricity bills.
Eskom spokesperson, Dikatso Mothae said the power utility “continues with initiatives to improve revenue recovery from residential customers”.
These include removing illegal connections, conducting meter audits, repairing faulty or tampered meters and limiting ghost vending of prepaid electricity, installing smart and/or prepaid meters within protective enclosures to prevent tampering, converting customers from post-paid to prepaid and stepping up disconnection of customers not honouring their current accounts
In his State of the Nation Address last week, President Cyril Ramaphosa announced that the ailing Eskom will continue to received further bailouts.
He said the government has a strategy to deal with Eskom defaulting on its loans.
“We will, therefore, table a Special Appropriation Bill on an urgent basis to allocate a significant portion of the R230-billion fiscal support that Eskom will require over the next 10 years in the early years,” Ramaphosa said.
The president also said that Eskom is working hard to recover money owed by municipalities and customers.
Additionally, he said that “the days of boycotting electricity payments are over”.
Meanwhile, according to Mothae, municipal debt is sitting at R20-billion as at the end of March 2019.
“We continue to have discussions with Municipalities, Provincial Government and National Government and the Inter-Ministerial Task Team to find a resolution. We are continuously reviewing Payment Arrangements with municipalities, issuing default letters and then as a last resort we start a PAJA [Promotion of Administrative Justice Act] process when they default which leads to planned power interruptions,” she said.
“However, we normally get interdicted by customers or customer groupings preventing us from interrupting electricity supply and Municipalities typically take payment holiday during these interdicts. Eskom has now started to issue summons to municipalities for the amount in the Acknowledgement of Debt,” Mothae added.
Earlier this year, the Orlando Action Committee said it was willing to negotiate with the President Cyril Ramaphosa on electricity payment.
The Sunday World reported that Gauteng townships have become “a nightmare” for Eskom employees, who are often “intimidated and assaulted when working in these areas”.
From September – provided they meet their deadlines – Investec staff members would have the option to move onto a new leave regime that places no limits on the number of days taken.
The bank would allow most of its employees to dress in any way they like, depending on who they meet during the day.
“We’re after a very adult relationship with our employees; people should feel entitled to look after themselves.”
The Money Show’s Bruce Whitfield interviewed Lesley-Anne Gatter, head of Human Resources at Investec SA.
Gatter said Investec would pay people according to output, not according to how many hours they were at work.
It would pay substantial bonuses to workers who innovate instead of merely ticking boxes.
The leave days employees decide to take would not affect their salaries.