The acquisition of 9mobile by Teleology Holding may go ahead, in spite of the controversies that have surrounded the entire process since inception. 9mobile’s acquisition by Teleology Holdings has incited opposition from many quarters, including some groups who are trying to use the courts to foil the process.
According to TMT Finance, even though the investment firm, Teleology Holdings will most likely not be disqualified from acquiring 9mobile, it may still be invited before Nigeria’s lower legislative chamber to make an official presentation of its plans for the telco.
In the meantime, the ongoing sale of the embattled telecoms company has been temporarily placed on hold by a Federal High Court. This is to deal with the protests of some of the company’s angry shareholders, including Nigerian businessman, Alhaji Dahiru Mangal.
Note that despite the court order, an informal approval has [allegedly] already been given for the continuation of the transaction. The deal is expected to close by the end of the second quarter of the year.
Will the 9mobile sale to Teleology ever take place?
In view of the controversies that have surrounded the acquisition of 9mobile by Teleology, it is interesting to see how the transaction could possibly be finalised. Recall that even though Teleology Holdings was the winner in the highly contested bidding process for 9mobile’s acquisition, the fact soon emerged that the company never offered to $500 million as most observers were initially made to believe. Instead, the company was only offering $301 million, just an additional $1 million compared to the $3000 million offered by Smile Telecoms Holdings Limited.
Teleology, which had earlier paid the compulsory $50 million non-refundable fee, is now finding it difficult to raise the rest of the money as most banks are reluctant to lend to it. This is despite the company’s hiring of top Swiss investment bank, UBS to facilitate a $300 million loan from local banks.
Despite these issues, Teleology Holdings is optimistic that the acquisition process would be finalised soon, even as they finally roll out their plans for the company. Adrian Wood, Teleology’s CEO, had stated that “9mobile is transiting into a new phase that will be defined by optimal value delivery: value to our employees, value to our customers, value to local communities and indeed to all stakeholders.”
Recall that the problem with Etisalat Nigeria, now 9mobile, started last year after the telco default on a $1.2 billion loan it obtained from a consortium of 13 Nigerian banks led by GTB. This caused the parent company (Etisalat of the United Arab Emirates) to pull out and relinquish its 45% stake in the company.
Following this development, the Central Bank of Nigerian restrained the Nigerian banks from taking over the telco. The CBN instead constituted an interim board to oversee the operations of the company. 9mobile currently commands an estimated market share of 11.72% in the country.
