Inside sources at India’s largest telecoms operator, Bharti Airtel has revealed the reason the telco withdrew from submitting a bid before the deadline for the sale of debt-ridden 9mobile.
According to the source,
Bharti Airtel does not see much value in buying debt-laden Nigerian rival 9mobile and withdrew from submitting a firm bid before the deadline.
Airtel did not have sufficient information to make an informed bid but added that privately-held Nigerian telecoms firm Globacom had submitted a financial bid.
Events leading to the sale of 9mobile
It would be recalled that Etisalat Nigeria, (now 9mobile) took out a $1.2 billion syndicated loan from a group of 13 local banks in 2013. The default led to parent company Etisalat of the UAE pulling out, forcing its lenders to step in. The Central Bank of Nigeria 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.
Series of Controversy
The sale process of the telecommunications firm has been chequered from the very start. First was the alleged dissatisfaction of the Central Bank of Nigeria (CBN) with certain aspects of the sales process. This was followed by the alleged withdrawal of Barclays Africa, as advisers to the process. This was then vehemently denied by the advisers.Submission of final bids was due to have closed in December last year but was extended following a request by 9Mobile’s board.
Spectrum wireless recently obtained a court order declaring the interim board of 9Mobile illegal. The company also claimed to have invested in EMTS, the indigenous investor in the defunct Etisalat Nigeria. The action could thus render the transaction process initiated by the board in jeopardy.
The eventual winner of the bid process would have to contend with a court order obtained by Spectrum Wireless, which declared 9Mobile’s interim board void. The consortia of banks that are essentially in charge of the telco, may be unwilling to take further provisions on the loan. Some of the lenders such as Access Bank and UBA have already made a 30% provision on the loan granted to 9Mobile.