The scramble
to acquire 9mobile, Nigeria’s fourth largest network operator, promises to be
very competitive, as 16 firms have submitted expressions of interest (EoIs) to
Barclays to bid for 9mobile, THISDAY has learnt.
Companies
that have expressed interest in 9mobile, which until recently was Etisalat
Nigeria Limited, until a debt default forced its former owner to relinquish its
stake in the firm and exit Nigeria, include Africa’s biggest telecoms operator,
MTN; India’s Bharti Airtel, operating as Airtel in Nigeria; and ntel, which in
2015 acquired the assets of the defunct NITEL and MTel through the federal
government’s privatisation programme.
Also in the
race are Bua Group, the privately held conglomerate promoted by Alhaji
Abdulsamad Rabiu; Morning Side Capital Partners, promoted by the former
Managing Director of Diamond Bank Plc, Mr. Alex Otti; and Africell, a
subsidiary of the Lebanon-based Lintel Group of Companies, with cellular
communications operations in the Democratic Republic of Congo (DRC), The
Gambia, Sierra Leone and Uganda.
Other firms
that submitted EoIs are Obot Etiebet & Co, belonging to a former petroleum
minister, Mr. Don Etiebet; Blackstone Private Equity; Tel-ology Holdings
Limited, a special purpose vehicle led by a former chief executive of MTN
Nigeria, Mr. Adian Wood, and Ericsson; De-elim Services Limited; Veittel, a
firm owned by the investment arm of the Vietnamese military which has telecoms
assets in Africa; AB-Bro Limited, a Nigerian venture company; Hamilton and
George International Limited; and two other firms.
Industry
sources confirmed to THISDAY that the 16 companies had complied with the
deadline for the submission of EoIs at Barclays’ office in Ikoyi, Lagos, and
are preparing to access the data room to conduct their due diligence on
9mobile, preparatory for the bid submission stage.
Etisalat
Nigeria had taken out a $1.2 billion syndicated loan from a group of 13 banks
but struggled to make repayments this year due to a currency crisis and
recession in Nigeria.
The Central
Bank of Nigeria (CBN) was forced to intervene to save the company from collapse
and prevent creditors from putting it into receivership, leading to a change in
its board and management, as well as the new name 9mobile.
The crisis
forced the telecoms company’s one-time parent Etisalat to terminate its
management agreement with its Nigerian business and surrender its 45 per cent
stake to a trustee following the central bank intervention.
9mobile CEO
Boye Olusanya has said he is focused on getting the telecoms company back on
track to make a profit, while working on the paperwork to eventually raise new
capital, adding the company was open to new investors.
The 13 banks
have put a freeze on collecting the principal and interest payments on the
syndicated loan pending new investors, in order to help the company survive,
the sources told Reuters.
They have
also held back on taking provisions for the syndicated loan and agreed to
extend it after the regulatory intervention in July.
The sources
said the central bank had asked the lenders to take a five percent provision on
the loan as part of their third quarter results due this month. Some lenders,
such as Zenith Bank, UBA, and Access Bank have already made 30 per cent
provisions to cover direct lending to 9mobile outside the syndicated loan.
9mobile has
over 20 million subscribers with a 14 per cent share of the Nigerian market.
South
Africa’s MTN is the market leader with 47 per cent, Globacom has 20 per cent
while Airtel has 19 per cent.
The Nigerian
lenders with exposure to the telecoms firm had given Barclays the mandate to
handle the sale of 9mobile, after Citigroup and Standard Bank, previously in
the running for the role, were dropped.
According to
Reuters, the lenders decided against Citigroup and Standard Bank due to their
previous ties to 9mobile.
Standard
Bank’s Nigerian subsidiary, Stanbic IBTC Bank is among the group of lenders to
9mobile while Citi has advised the telecoms company in the past, said banking
sources.
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