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Fresh hurdles hit proposed sale of 9Mobile

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Intrigues and challenges surrounding proposed sale of 9Mobile have become more herculean than stakeholders would have imagined. 

Thus, Nigerians might have to wait longer before new buyers could be announced.

This follows warning issued by the Chairman, House committee on Telecommunications, Saheed Akinade-Fijabi. He threatened that the House of Representatives may be forced to stop the ongoing sale of 9mobile to Teleology Holdings.

The lawmaker raised the alarm at a hearing while reacting to petitions and concerns raised by the Nigerian Communications Commission (NCC), the Central Bank of Nigeria (CBN) and some of the vendors owed by 9mobile.

At the hearing, NCC Executive Vice Chairman, Prof. Umar Dambatta, refuted claims of payment of $50 million non- refundable fee allegedly paid by the preferred bidder, Teleology Holdings.

At least, Prof. Dambatta denied any knowledge of the account the money was paid into.

To complicate matters, a representative of the CBN also denied the payment of such fund.

It was widely reported in the media recently, the announced payment of the $50 million nonrefundable by the preferred bidder, Teleology Holdings.

Recall in year 2013, Etsialat (now 9Mobile) delved into obtaining loans summed up to $1.2 billion from thirteen Nigerian banks.

The banks worth the most exposures include Zenith Bank, Guaranty Trust Bank and Access Bank with the total loan – N80 billion, N42 billion and N40 billion respectively. In this regards, they can’t easily balance their accounts; hence their operating licences are at stake too. So, when the CBN pushes then hard, they flash the Etialat loan as the reason accounts aren’t balancing.

In 2016, the company failed to meet its debt servicing obligations, which was according to them as a result of the economic downturn and its effect on the Naira. The banks reported to telecommunications sector regulator- NCC, and financial sector regulator- CBN, demanding to recover the loan or take-over the company.

On March 10, 2017, the intervention of the NCC and CBN succeeded in persuading the banks to suspend their threat to take-over Etisalat, after all parties agreed to restructure the loan, with May 31, 2017 as the new repayment deadline. Again, Etisalat failed to meet the deadline. Further negotiations later collapsed, resulting in the banks issuing a final defaulting note and enforcement notice on June 9, 2017 to Etisalat, to commence the process to take-over Etisalat after it reneged on the agreed repayment deadline, effective June 15, 2017.

Fortunately, CBN and the NCC came to the rescue of this company because they didn’t want the ‘dismemberment’ of the company which would throw workers into disarray. This singular act led to a change in the management and board of the company, as well as the transition of its name from Etisalat to 9mobile.

Subsequently, 9mobile was handed over to Barclays to conduct an acquisition, after previous engagements with Standard bank and Citigroup has been dropped. Over ten companies – including Globacom, Airtel, Smile Communications, Helios, and Teleology Holdings Limited – have submitted their Expression of Interest (EoI) forms to Barclays. Speculations have it that the process might have been opaque. While a large chunk of the population are of the view that the company has been sold to Globacom, others state otherwise.

At a point, Teleology was mostly publicised as has emerged the preferred bidder. Later, it was confirmed that the bidding process is still ongoing.

The confusion is so much that Airtel and Helios were said to have petitioned the presidency over the bidding process.

Nobody has concretely told the market true position of things. In all this, 9Mobile brand name is at stake.

Meanwhile, the Central Bank has promised to carry out a financial check on the winner of the sale while the Nigerian Communications Commission will focus on the buyer’s technical competence and quality service to its subscribers.

As it stands now, the proposed sale of 9mobile is still an ongoing process which only the NCC can tell the due date. The battle is between Smile Communications and Teleology; till then, the status quo remains.