Cellcom says company not for sale
Israel's largest mobile phone operator expects further decline in revenue and profit in second quarter, denies its financially-strapped controlling shareholder has made offer to third party to buy it
In a preliminary estimate of results to be released in August, Cellcom said it expected revenue to reach NIS 1.22-1.24 billion ($342-$347 million) in the April-June period and net profit NIS 55-65 million ($15-18 million). In the second quarter of 2012, it posted profit of NIS 121 million ($33 million) on revenue of NIS 1.5 billion ($420 million).
Israel's mobile phone industry was shaken up last year with the entry of six new operators, sparking a price war – with unlimited calling plans for $25 a month or lower. That led to steep drops in subscribers, revenue and profit at Cellcom and two incumbent rivals.
Cellcom noted, though, that revenue from services, average revenue per subscriber and earnings before interest, taxes depreciation and amortization increased from the first quarter.
It added that "may not continue in future quarters."
Cellcom said it had provided the preliminary figures at the request of its controlling shareholder, conglomerate IDB Holding Corp, in connection with a debt arrangement at IDB.
IDB Holding owes NIS 2 billion ($560 million) while its unit IDB Development owes NIS 5.8 billion ($1.6 billion). Bondholders have proposed a debt restructuring that would oust IDB Holding Chairman Nochi Dankner and give them full control of a combined company.
In a bid to keep control, Dankner and IDB have made a new debt proposal which needs court approval.
Cellcom also said that IDB "has notified it that contrary to rumors in the media regarding an offer supposedly made to a third party to purchase the company, the company is not up for sale."
On Monday, Israeli media reported that the owners of Golan Telecom, one of the new mobile phone operators, had been offered the chance to acquire control of Cellcom and were seriously considering the proposal.
Cellcom is controlled by Discount Investment Corp, which is a subsidiary of IDB.
