Smile communications Nigeria Limited has reacted to reports that it defaulted on a $125m loan obligation.
The management of the company noted it has never defaulted on any of its loan obligations adding that the story was an attempt to derail the ongoing investigative hearing on the 9mobile acquisition bid process currently ongoing at the House of Representatives Committee on Telecommunications.
According to Thisday, the broadband company which emerged as the reserved bidder in the sale of 9mobile is currently battling with a loan default of $125 million.
The report revealed that the company acquired the loan from Afrexim Bank, and routed the loan through a syndicate of local banks.
The report further revealed that the loan was to help fund the company’s infrastructure expansion plans and was structured so that it could be disbursed in tranches based on the attainment of critical milestones, including certain increases in active subscriber numbers.
Tales of controversy
Recall that Smile communications had written a letter to the Financial Advisor in the bid process Barclays Africa. In the letter, it faulted the process, in which Barclays Africa, announced Teleology Holdings as the preferred bidder.
Sequel to petitions received the House of Representatives has also begun an investigative hearing into the process leading to the announcement of Teleology Holdings as the preferred bidder.
Recently, Federal High Court sitting in Abuja suspended the planned sale of 9Mobile. The parties in the suit are Afdin Ventures Limited and Dirbia Nigeria Limited, who claimed they were left in the dark concerning the sale process.
In addition, they also requested for the sum of N1 billion as general damages and a refund of their investment funds totaling $43.3 million. In her ruling, Justice Binta Nyako ordered all parties to maintain the status quo.
9Mobile (then known as Etisalat Nigeria) defaulted on a $1.2 billion loan it had obtained from a consortium of banks led by GT Bank. The default led to parent company Etisalat of the UAE pulling out and the banks threatening to take over the firm.
They were however prevented from doing so by the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC). An interim board was subsequently appointed. Some of the banks have since taken provisions on the loan.
Smile Communications obtained its operating license from the Nigerian Communications Commission (NCC) in 2009, and in 2014, launched its 4G/LTE network, covering eight cities, which include Lagos, Abuja, Port Harcourt, Ibadan, Benin-City, Kaduna, Onitsha, and Asaba.