9mobile says it remains a stable business as search for new investor continues
Jumoke Akiyode- Lawanson
9mobile has released a statement saying that it remains a stable business and that the on-going process to get new investors remains on track.
“Contrary to any indication in the BusinessDay report, we main stable and orderly run business, firmly committed to meeting the expectations of our loyal customers and service providers” the company stated debunking an earlier report by this paper highlighting some of the challenges that the company is facing in its bid to attract a new core investor.
Industry players were recently taken by surprise in the 9mobile bidding process when Bharti Airtel, one of the five listed potential investors pulled out of the process. Airtel decided not to submit a final bid by the January 16 deadline.
This was especially so because industry watchers thought that Airtel had a strong chance of taking over the fourth largest telecommunications network, alongside Globacom, to become the largest network operator in the country, especially after the Nigerian Communications Commission (NCC) stated that a consolidation would be most likely.
Airtel’s withdrawal comes after a Federal High Court had also nullified the transitional board put up by the creditors and the central bank after Spectrum Wireless took United Capital Trustees Limited, representatives of the bank debtors to court, challenging the earlier granted ex-parte order.
Explaining their reason for withdrawing from the process, sources at Airtel told BusinessDay; “We decided not to submit a final bid because we felt that we did not have sufficient information to make an informed bid.”
Another source told BusinessDay that; “All Airtel and most other interested investors knew was that Etisalat missed a $1.2billion debt payment owed to a consortium of 13 Nigerian banks. They were never told about the other non-bank creditors and why the main directors decided to leave the company until Spectrum Wireless took United Capital Limited and the new board to court.”
Bharti Airtel, Smile Telecoms Holdings, Helios Investment Partners LLP, Teleology Holdings Limited and Globacom were in December 2017, shortlisted as the five bidders still in the running to take over ownership of 9mobile, after rescheduled bidding process took place with the approval of both regulators and lender banks involved.
According to The Cable News, Globacom and Helios Investment Partners LLP submitted bids but did not make any financial offer for 9mobile.
It was also reported that Teleology Holdings Limited submitted a bid in excess of $500 million while Smile Telecoms Holdings quoted close to $300 million.
However, Reuters reported on January 25 that Barclays Africa is already examining takeover bids from five prospective buyers for 9mobile, according to two banking sources, although a deal may take a few months as it will involve restructuring the company’s debt after a default last year.
Barclays Africa, appointed by Nigerian banks to try to find new investors for 9mobile, will make a recommendation to the telecom company later.
“This is not a simple bid. Where there’s a restructuring … investors would state conditions and negotiate what haircut (losses) if any, in respect to trade and financial creditors,” one of the sources told Reuters.
“Time to complete the deal will depend on how quickly advisers analyse the bids and make recommendations to 9mobile.”
Previously known as Etisalat Nigeria, 9mobile took out a $1.2 billion syndicated loan from a group of 13 local banks in 2013 but struggled to make repayments last year, forcing its lenders to step in.
The central bank then intervened to stop creditors from putting it into receivership, leading to a change in its board and management, as well as its new company name.
The crisis forced parent company Etisalat to terminate its management agreement with the Nigerian business and surrender its 45 percent stake to a trustee after the central bank intervention.
Another source said 9mobile’s board and its advisers, regulators and lenders witnessed the bid opening.
“There was screening of a large number of bidders which was narrowed down to five. They were given access to the management and site visits,” the second source said, without naming the bidders.
Since its debt problems came to light, 9mobile, the country’s fourth-biggest operator, has rapidly lost subscribers. In October its users numbered 17.1 million, giving it a 12.2 percent market share, down from 20 million earlier last year, the telecoms regulator said.
But in a statement made available to BusinessDay, 9mobile assured customers and partners of its commitment to sustaining its growth trajectory, while continuing to deliver best-in-class services to its numerous subscribers.
Figures from the National Bureau of Statistics (NBS) show that 9Mobile remains attractive to subscribers as the network company continues to attract subscribers.
According to the NBS report for Q3 2017, 9Mobile recorded the highest number of subscribers who ported from other networks to its network.
Total Numbers Ported – Incoming from Other Networks to 9mobile was at 11,517 followed by Airtel at 2,660, MTN and Glo had 1,928 and 704 porters respectively.
“Provision of good quality service by the telecom network to its subscribers led to the increase in the in-porting customers”, Boye Olusanya, CEO 9Mobile told BusinessDay on phone.
The telecom company also accounted for the least total numbers Ported – Outgoing to other Networks, at 2,926, followed by Glo at 4,314 while Mtn and Airtel recorded the highest number of outgoing customers at 4,625 and 4,840 respectively.
The company attracted the highest number of incoming porters despite the challenges it faced during the period under review.
The withdrawal of Airtel leaves Glomobile as the only existing player in the telecom industry with a potential to buy over 9mobile and leapfrog South Africa’s MTN, which remains the market leader in Nigeria’s telecom industry with a 36.1 percent share of the market.
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