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Teleology Holdings may go ahead with the 9mobile acquisition despite controversies

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Andrian Wood of Teleology

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.

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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.

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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.

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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.

Patricia

Emmanuel covers the financial services sector for Nairametrics. Do you have a scoop for him? Well then, contact him via his email- [email protected]

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Financial Services

Guinea Insurance Plc gives optimistic Q3 earnings forecast in spite of COVID-19

Note that some companies have had to revise their earnings estimates due to pandemic.

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Guinea Insurance Plc

Guinea Insurance Plc is being very optimistic, having projected a 78.6% rise in gross premium written to N1.8 in Q3 2020, up from N1 billion during the comparable period in 2019. The insurer also forecasted a profit after tax of N185.8 million for the period, indicating an expected better performance compared to N735 million loss recorded in Q3 2019.

The earnings forecast, which was sent to the Nigerian Stock Exchange earlier today, also estimated that reinsurance expense for Q3 will be at N337.5 million. Claims expenses, underwriting expenses, and other operating experiences were equally put at N331.3 million, N292.6 million, and N692.2 million, respectively.

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Note that this forecast is coming amid the negative economic impacts wrought by the Coronavirus pandemic. But while a growing list of companies (including Guinness Nigeria Plc) has downgraded their 2020 earnings and profitability forecasts, Guinea Insurance is expecting growth and that is good.

In Q1 2020, Guinea Insurance Plc reported gross premium written OF N207 million and a profit after tax of N12.6 million. The company’s consolidated half-year 2020 financial has not been released and is expected sometime between this month and next month.

The company’s share price ended today’s trading on the Nigerian Stock Exchange at N0.20. Year to date, this stock has not recorded any price movement.

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Economy & Politics

CBN unification of exchange rate a welcome development – MAN

Ahmed urged the CBN to tackle activities that made speculators manipulate the multiple exchange rates.

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CBN unification of exchange rate a welcome development-MAN

The President of the Manufacturers Association of Nigeria (MAN), Mr Mansur Ahmed, announced on Friday that the recent CBN unification of Nigeria’s exchange rate is a welcome development that will boost investor confidence in Nigeria.

He said the exchange rate unification will enable stable planned production for manufacturers in Nigeria leading to economic growth, adding that the Manufacturers Association had urged for an exchange rate unification to enable a market-friendly business environment in Nigeria.

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“Clearly, this is a welcome development and a laudable initiative that has come at the right time.”

“This is more so, particularly, now that the economic outlook is gloomy in light of the impact of the ravaging COVID-19 pandemic that has culminated in uninspiring macroeconomic situations,” he said.

He revealed that the World Bank had attributed Nigeria’s falling Foreign Direct Investment (FDI) to the multiple exchange rates as investors felt a “manipulation of the foreign exchange market.”

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“The unification will also boost investors’ confidence, control rising inflation, and promote transparency, entrench better exchange rate management and eradicate distortions to the barest minimum,” he added.

READ MORE: After hitting a 3-year low during the week, Naira stabilizes as traders wonder what next)

He urged the CBN to tackle activities that made speculators manipulate the multiple exchange rates like “round-tripping” which he says expand the inflows of foreign investment into the economy.

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He called on the Central Bank to implement 2 strategies to ensure a smooth transition into a unified exchange rate system.

“The first is to limit the short-term pains until efficiency gains materialize by responding swiftly with an inward-oriented rescue guideline while the second should seek to boost the pace at which such efficiency gains materialize,” he said.

He advised, it’s necessary the CBN “submit all the instruments of exchange rate determination” towards a free-market approach.

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Appointments

Seplat appoints Emeka Onwuka as CFO

Onwuka has over 30 years’ experience in financial services across Sub-Saharan Africa. 

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Seplat appoints Emeka Onwuka as CFO

Seplat Petroleum Development Company Plc. has appointed Mr. Emeka Onwuka as Chief Financial Officer and Executive Director, Lagos, and London.

The appointment takes effect from August 1, 2020.

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The appointment was announced in a notice sent to the Nigeria Stock Exchange on Friday and has been ratified by the company’s board of directors.

According to the notice which was signed by the company secretary and chief governance compliance officer, Mrs. Edith Onwuchekwa, the Board of Seplat is confident that “the wealth of knowledge and experience Onwuka brings will be a great addition to the Company”.

Mr. Onwuka has over 30 years’ experience in financial services across Sub-Saharan Africa. Mr Onwuka is a Partner at Andersen Tax Nigeria and holds various Board positions as Chairman; FMDQ Securities Exchange Limited; Director FMDQ Holdings Limited; Director, Ecobank Nigeria Limited; and Director, Bharti Airtel Nigeria.

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He was also the former Group Managing Director /CEO of Diamond Bank Plc and former Chairman of Enterprise Bank Limited.

READ MORE: This is what Ngozi Okonjo-Iweala is up against

He is a Chartered Accountant, a Fellow of the Institute of Chartered Accountants of Nigeria, and a Fellow of Chartered Institute of Taxation of Nigeria.

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Mr. Onwuka received his B.SC. in Political Science from the University of Nigeria, Nsukka, and holds an MBA from the University of Benin.

He is an alumnus of the Lagos Business School, Wharton Business School and Harvard Business School.

Onwuka also holds the Nigerian National Honor, Officer of the Order of the Niger (OON).

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