It seems every time Telecel is in the news, something bad has happened. If it’s not about their subscriber base dwindling then its about the boardroom struggles that have become a normal part of life at Telecel. Most recently, Business Times managed to secure some documents that show a harsh reality when it comes to Telecel’s finances.
The telecommunications company reportedly made losses of $18.2 million in the nine months leading up to September. The Business Times report echoed recent sentiments that target James Makamba and a lack of capital investment as BT lamented the company’s ‘weak balance sheet’ and ‘weak corporate governance’.
It gets worse as Telecel seems to be heavily indebted which has led to the telecoms minnow receiving 5 summons and over 20 letters of demands from creditors clamouring to get their money back.
It also seems board members have been abusing their privileges as one company that is owned by a board member is said to have been overpaid for provision of services.
Most alarmingly, however, is the pegging of assets against liabilities. Telecel’s assets are believed to be around $11.37 million against liabilities of $141.8.
Is Telecel attractive to investors?
The government has been on record saying they want to sell their stake in Telecel and NetOne. It seems the financial troubles of Telecel are much more serious than expected and even though this was one of the companies that the government wanted to partially privatise, it is hard to see who the telecoms company would be attractive to in its state. Maybe the best approach for Telecel would be declaring for bankruptcy in order to sell on more appealing terms to whoever steps in.
They have an alarmingly low subscriber base which means whoever is going to invest into the company either has to be very patient before they see their return on investment or they have to have some kind of magic wand to fix these problems.