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- Huge Group was involved in a dispute with Cell C over its decision to terminate services to its clients.
- Huge says the settlement is expected to have an immaterial impact on cashflows and its cash position.
- The two companies had launched counter financial claims against each other.
Huge Group and Cell C have settled their disputes over the termination of the services carried by the cellular company which had dragged on since 2019, it was announced on Wednesday.
Huge Group subsidiary Huge Cellular had sought to prevent Cell C from cutting off communication services to its clients, an action which was going to affect more than 20 000 of its customers.
The dispute had seen the companies drag each other to court, with financial counter-claims thrown at each other. At the heart of the 2020 court case was a claim by Cell C that Huge owed it R60 million. The company disputed the claim, and instead stated that Cell C also owed it R4 million.
In a note to shareholders, Huge Group announced that it had concluded an agreement that settles their respective disputes with Cell C, stating that "the settlement will not have a material effect" on its earnings and headline earnings for the six months to end of August, nor its future earnings and headline earnings.
The company did not reveal any details of the settlement, except that it would have an "immaterial impact on cash flows and the current cash position of Huge".
"The market perception of the value of an ordinary share of Huge may have been negatively impacted by the disputes", the company said, adding that the board was of the view that "the settlement should have a positive impact on the valuation of Huge."
Huge Group CEO, James Herbst, had told TechCentral in September 2020 on Wednesday that Cell had received a "windfall gain of R60 million at my expense" as part of a deal between the parties.
On the other hand, Cell C had accused Huge Group of getting a free ride on the company's infrastructure for over a year without paying what was due for the services rendered.
In August 2020, Cell C had informed Huge Cellular that it would no longer offer services to Huge clients and gave the company until 31 October 2020 to migrate its customers to an alternative mobile network. A deal was later reached with MTN to migrate Huge clients to its fold.
