Reports have it that the preferred bidder in the 9mobile sale, Teleology Holdings may face more hurdles in raising the balance $500 million bid as several banks are skeptical about lending to the company and uncertainty in the telecoms industry.
Fears by the banks
- Businessday reports that banks are cautious of lending to the sector after been forced to make provisions for the initial loans extended to the then Etisalat.
- There are also fears in the banking industry that the voice segment of the industry is no longer profitable and the revenue from the Data segment has plummeted due to intense competition in the industry.
- Also, recent development such as the Senate interruption and recent court orders have reduced investors confidence in the bidding process.
The long Journey so far
Etisalat Nigeria, now 9mobile plunged into crisis last year after it defaulted on a $1.2bn loan facility from a consortium of banks in the country.
This led to the parent company Etisalat of the UAE pulling out and relinquishing its 45% stake in the telco.
The banks were restrained from taking over the telco by the Central Bank of Nigeria with several of them taken provisions on the loan. The CBN also constituted a board to oversee the operations of the company
The preferred bidder in the 9mobile sale, Teleology Holdings had paid the initial $50m non-refundable fee before the deadline March 22nd.
However, the company needs to cough out an additional $450 million to complete the acquisition and has been given another 90 days to make the payment from March 22, 2018.
The final sale will be ratified by the Nigeria Communications Commission NCC after a technical competence test has been carried out and financial evaluation by the Central Bank Of Nigeria.