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Barclays confirms Teleology as 9mobile preferred bidder

by Jumoke Akiyode-Lawanson

February 22, 2018 | 2:00 am
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Barclays Africa has officially written to Teleology holding limited, informing the company that it is the preferred bidder for the 9mobile sale, BusinessDay has gathered.
In the letter sent to Teleology holdings yesterday 21, February 2018 Barclays Africa, the financial adviser to the consortium of banks owed $1.2billion dollars by 9mobile (formerly Etisalat) said that they had reviewed all bids submitted and recommends Teleology as the preferred bidder. The company was then asked to make a non-refundable financial deposit of $50 million dollars within the next 21 days to seal the deal.
BusinessDay sources say that ‘the Nigerian Communications Commission (NCC ) and the Central Bank of Nigeria (CBN) will then be notified of the recommendation after the deposit has been made.’
In a meeting held with the interested bidders on the 26th of January 2018, Barclays gave Smile Communications the opportunity to increase their bid for 9mobile within 30 days which brought the deadline date to Monday February 26 2018.
However, with the letter sent to Teleology yesterday, it seems Smile has refused to bid any higher than the initial $300 million quoted.
The final bidding submission showed that Teleology submitted a financial bid in excess of $500 million dollars before the January 16, 2018 deadline while Smile Telecoms Holdings quoted close to $300 million.
Tony Ojobo, Director Public Affairs, NCC said ‘the winner will now apply to NCC in order to commence the processes for securing the regulatory approvals from the Board of the NCC necessary to give full effect to the transfer.’
The two contenders remained after Bharti Airtel pulled out of the bidding process saying that there were a lot of “hidden things” surrounding the health of 9mobile and, “we decided not to submit a final bid because we felt that we did not have sufficient information to make an informed bid.”
There was also confirmation that Globacom and Helios Investment Partners failed to back their technical bids with the submission of a concrete financial bid.
This development came after Spectrum Wireless, spearheading other none bank investors in EMTS also known as Etisalat, now 9mobile, with about 17.5 percent stake in the company had taken United Capital Trustees Limited, representatives of the bank debtors to court, challenging the earlier granted ex-parte order, which led to the nullification of the Interim Board set up for 9mobile.
Teleology Holding Limited is an SPV formed and owned by telecommunications industry veterans, specifically to acquire a substantial holding in 9mobile and thereafter potentially other underperforming Mobile Network Operators (MNOs). Included in this team are five of the top leadership executives who established and grew MTN Nigeria from 2001 to 2005.
Having emerged preferred bidder, Teleology will acquire 9mobile and be faced with the responsibility of retaining its 17 million customers and improving on the company’s 12 per cent market share.
Johnson Chukwu, managing director, Cowry Asset Management limited said, given that the government wants to redeem short term maturing federal government debt instruments worth the equivalent of $2.5billion, that is about N765billion, it may be advisable to stagger the redemption to avoid creating Naira liquidity gloat or upsetting macroeconomic stability.
“A repayment of N765billion of the N2.7trillion outstanding Treasury Bills, will amount to a redemption/cancellation of about 28% of all outstanding T/Bills. This will lead to a sharp drop in interest rates as the debt holders seek for reinvestment outlets. Such sudden depression in yields will have the unintended consequence of discouraging foreign investors from investing in the short-end of the Nigerian debt market and possibly lead to reverse capital flow thereby exerting pressure on the country’s foreign reserve. There is also the additional risk of triggering an inflationary pressure which could erode some of the gains made in driving down inflation. It may therefore be advisable to not only stagger the redemption of maturing Treasury bills but to also apply part of the proceeds of the $2.5billion Eurobond proceeds to redeem some Federal government bonds that will be maturing in 2019. This will minimize the liquidity overhang that could occur as a result of applying the entire funds to redeem only treasury bills,” Chukwu said.

 

Jumoke Akiyode-Lawanson

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by Jumoke Akiyode-Lawanson

February 22, 2018 | 2:00 am
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