MultiChoice Group CEO Calvo Mawela recently addressed concerns about the company’s financial status, emphasizing that while the company reported a substantial loss and a decline in active DStv subscribers, it remains in a strong cash position.
Mawela explained that discussions with lenders have been positive, and they are comfortable with the underlying business.
Despite experiencing a challenging financial year, including significant losses and a decrease in assets, Mawela highlighted that certain non-cash factors, such as accounting rules and derivative instruments, have impacted the company’s balance sheet. He emphasized that the company’s cash position remains robust, with significant net available cash.
However, some analysts have expressed apprehensions about the company’s financial performance. Shane Watkins, chief investment officer at All Weather Capital, raised concerns about the authenticity of certain profits and urged investors to exercise caution. Furthermore, uncertainties surrounding a mandatory acquisition offer from French media giant Groupe Canal+ have added to the complexity of the company’s financial landscape.
In response to these challenges, MultiChoice announced its decision to sell a majority stake in its insurance business, NMS Insurance Services (NMSIS), to Sanlam for US$148 million. While this move raises concerns about the company’s working capital, it demonstrates their proactive approach to addressing financial pressures.