Teleology holdings, winner of the bid for troubled GSM operator 9Mobile (formerly Etisalat Nigeria), may have to fork up an additional $50 million as payment for the firm. The payment was requested by the Central Bank of Nigeria (CBN) as a sign of its continued commitment to the transaction. The firm triggered a 20-day extension clause in its bid agreement.
Teleology in April made a $50 million deposit and was granted a 90-day deadline to pay the $251 million balance. Smile communications, the reserve bidder made a bid of $300 million.
Adrian Woods, lead frontman for the company, in a ThisDay interview in March revealed that several of Teleology’s investors where one time executives of MTN. Woods himself was Chief Executive Officer (CEO) of MTN Nigeria from 2001-2004. Funding for the transaction was also to be provided by the Africa Import-Export Bank (AFREXIM) and Swiss Bank UBS.
The extension is the latest in the twist and turns associated with the sale of the firm. Initial reports had suggested that the firm made a bid of $500 million for 9Mobile, turned out to be false.
Smile communications and several parties that took part in the bid process had alleged a lack of transparency. Parties familiar with the transaction, however, denied that. The House of Representatives has since waded into the transaction.
A Federal High Court had also suspended the sale of the company, due to opposition from parties invested in one of its legacy shareholders.
As the wait continues
While Teleology concludes arrangements for the payment, initiatives such as 9Pay have seemingly gone cold. Other operators have increasingly churned out strategies in the midst of limited consumer spending.
As at May 2018, 9Mobile had 16 million subscribers, accounting for 10% of the GSM market. MTN maintains its dominance with 66.4 million subscribers. Glo and Airtel take up 2nd and 3rd positions with 39.8 million and 39.7 million subscribers respectively.
Etisalat Nigeria, now 9mobile plunged into crisis last year after it defaulted on a $1.2 billion loan facility from a consortium of banks in the country led by GTBank. This led to the parent company (i.e., Etisalat of the United Arab Emirates) pulling out and relinquishing its 45% stake in the company.
The banks were restrained from taking over the telecommunications firm by the Central Bank of Nigeria (CBN) in conjunction with the Nigerian Communications Commission (NCC). Several of them taken provisions on the loan. The CBN also constituted a board to oversee the operations of the company.