Cell C interim CEO Douglas Stevenson acknowledges company challenges, updates public
Cell C is strategically positioning itself for participation, Douglas says, sharing changes being he's making.
On Thursday 11 July, Cell C interim CEO Douglas Craigie Stevenson released a letter to the public in which he addressed what has been happening at Cell C.
In his letter, Stevenson said that when he was appointed in March, he had the clear mandate from the Cell C board to “right-size and optimise the business”. He added that there was an acknowledgement that the company faces and continues to face, financial and other challenges.
Part of the company’s restructuring process to become “significantly better focused on operational performance, sound business ethics and accountability throughout the business”, was the appointment of a new leadership team which, in an intensive 120-day period, has a clear direction and have focused on ways to execute and implement a new business plan, aimed at simplifying the business model, pursue a recapitalisation to optimise the capital structure, extract greater value from their existing roaming agreement, and optimise network revenue and usage.
“Our efforts to improve the financial management of the business were enhanced in December 2018 with the board appointment of a new CFO, Zaf Mahomed, who has extensive business and finance experience,” Stevenson said, referring to the financial results for Q2 2019, which are showing some “promising improvements to the bottom line, based on the measures taken since March”.
Cell C has also appointed Deloitte as independent financial restructuring advisors to assist in optimising business processes. “The company continues to face real challenges and we are in active discussions with our stakeholders with a view to achieving a secure financial position,” Stevenson said.
In the interim, Stevenson reported that Cell C has implemented a wide range of initiatives across the business to improve and meet the requirements of the King IV Code of Corporate Governance, including driving greater transparency to the board.
The company has appointed attorneys Bowmans to investigate any parts of the business where there is suspected irregular business practices, and have also hired PwC to do a full procurement audit and review of its processes.
Cell C’s new executive team, along with its new management committee is aligned with its’ priorities and has committed to ensuring changes that are necessary to deliver on the new business strategy.
He continued to report that the company has implemented significant austerity measures and has cut costs which do not contribute to revenue-generating activities, including a review of all contracts to ensure alignment with business priorities and a hiring freeze.
Cell C has engaged in discussions with its staff and the company’s union in an open and transparent manner and adhering to all legal requirements. To this end, the company has appointed new HR executive Juba Mashaba and human capital development and transformation executive Juliet Mhango.
Cell C has also focused on stabilising relationships with its labour force and implemented a signed recognition agreement and formal engagement structures, actively communicated with employees on the direction and state of the business, re-emphasised that non-compliance with policies and procedures will not be tolerated, and taken meaningful steps to inculcate a transparent performance culture aligned with the business strategy.
Cell C has a zero-tolerance policy towards illegal or unethical activity and has encouraged employees to use the independent whistle-blowers service to anonymously report irregularities or illegal activities.
“We are also strengthening our board with independent non-executive directors in line with the King IV Code of Corporate Governance,” Stevenson said.
“I want to emphasise that Cell C is strategically positioning itself and we are using our best efforts to be a strong participant in the industry, I firmly believe we are on the right track.”