The Nigerian Communications Communication, NCC and its Executive Vice Chairman, Umar Garba Danbatta are deliberately frustrating the sale of 9Mobile, formally Etisalat with its refusal to issue a “No Objection” that will pave way for the final sale of the company to the preferred bidder, who have since transferred USD$251 million, the outstanding balance, into an escrow account at the CBN since June 29, 2018, THEWILL can exclusively report.
Another insider said MTN is blocking the sale because it is scared that Adrian Wood, its former CEO in Nigeria that is the main promoter of Teleology, will turn the fortunes of 9Mobile around and cut into its rebounding profitability.
“Although all the telecoms (except MTN) are owing NCC various fees and have been left to run their businesses, NCC suddenly insisted that 9Mobile pay up their fees, having earlier agreed to defer these fees until sale is completed and the new owners can deal with it. After exhausting all means to let NCC back down from this sudden stance, 9Mobile, with its struggling finances, coughed up N6 billion and paid NCC. Yet, the No Objection letter is still not issued!” another the source said, tendering a copy of NCC’s approval to defer payments.
Sources within the NCC and the CBN with deep knowledge of the sale process, who opted to remain anonymous, told this news website that the NCC’s refusal to issue a “No Objection” letter is unjustifiable having from the onset directly managed the sale process with the CBN in a bid to save the telecommunications sector from a looming disaster and stop huge losses totaling about USD$1.2bn to banks. Etisalat had 19 million subscribers as at the time of the crisis.
“Both the NCC and CBN have worked together harmoniously in piloting the operational affairs of 9Mobile, as well as in superintending over the company’s sale process. In fact, both organizations jointly appointed Dr. Okwu Joseph Nnanna as the Chairman of the Company’s Board, representing both the CBN and the NCC,” one of our sources said questioning the legitimacy of NCC’s deliberate delay.
Nnanna is a Deputy Governor of the CBN.
Records of the sale process of 9Mobile seen by THEWILL detailed a closely managed process by Barclays Africa, the Sole Financial Adviser to the sale process appointed by the consortium of Nigerian lender banks via a letter dated 7 September 2017.
In separate appointments, the lenders also hired the services of Olaniwun Ajayi as Legal Advisers and Ernst & Young as Tax Advisers.
Seventeen companies initially signified interest to acquire 9Mobile from which ten were shortlisted and invited to make presentations to the Board and selected stakeholders including all members of 9Mobile’s Interim Board, two representatives from the CBN (Mr Abdullahi Ahmad and Mr. Kevin Amugo), two representatives from the NCC (Engr. Edoyemi Ogoh and Mr. James Kalu), representatives of the Syndicate Lenders (UBA, Zenith, GT Bank, Stanbic), and Barclays Africa.
Following this exercise, according to records, Barclays Africa collated the individual scoring of each of the stakeholders (Board Members, Lenders, Reps from NCC and CBN) as well as the scoring from Barclays itself and reached a determination that Airtel, Smile, Helios, Teleology, and Globacom would move to the next phase.
The five successful companies were then allowed access to the data room of 9Mobile to complete their due diligence, conclude financing arrangements, and make a Binding Bid before January 16, 2018. Airtel would later drop out of the process voluntarily before the deadline thus leaving only four companies – Smile, Helios, Teleology and Globacom.
On 17 January 2018, in the physical presence of the Board Members, Lenders, CBN and NCC Reps, and Barclays Africa (including the Chairman of the Nigerian Business, Dotun Suleiman), all four (4) bids from Helios, Teleology, Smile, and Globacom were opened. While Globacom and Helios did not name a particular price for the shares of 9Mobile (leading to outright disqualification), Smile and Teleology proposed they would purchase 99.9% of 9Mobile shares for US$1, and also made the following proposals –
– US$120 million immediate cash injection as Working Capital
– US$100 million Secured Notes (7-yr term)
– US$500 million Unsecured Notes (10-ys term)
– Negotiate restructuring of remaining debt and obligations
** Teleology: US$301 million cash payment to lenders.
– US$100 million payment to creditors, vendors, and suppliers.
– US$130 million immediate cash injection as Working Capital
– Negotiate acquisition of US$25.5 million existing shareholder loans.
The sale process records informed that Barclays Africa asked both Smile and Teleology to approach the lenders, creditors and suppliers and negotiate directly with them within a 30day period.
Having considered and discussed these bids with respective bidders, the Lenders issued a letter dated 16 February 2018 stating that they elect to designate Teleology as the Preferred Bidder, and Smile as the Reserve Bidder.
Following this development, Barclays Africa invited the Preferred Bidder as required by the rules of the process to make a non-refundable deposit of US$50 million within 21 Working Days which it complied with and a letter acknowledging receipt and informing the lenders was issued on 21 March 2018 by the Trustee to the transaction, United Capital Trustees.
Following acknowledgement of receipt of the non-refundable deposit, the Preferred Bidder was via a letter dated 2 May 2018 from Barclays Africa given until 30 June 2018, to make the balance payment of US$251 million which it sourced from the Afrexim Bank, according to records.
In fact, the records of the process showed that through a letter dated 29th June 2018, Afrexim Bank informed Teleology that they have received approvals of both the Management and Board of the Bank to disburse the US$251 million to enable it complete the purchase and take full control of 9Mobile.
THEWILL gathered authoritatively that the USD$251 million has been sitting in the escrow account at the CBN for over 6 weeks waiting for Danbatta and the NCC to give a “No Objection” to a process that it was fully involved in.
THEWILL further gathered that both the lenders, who by extension are owners of 9Mobile and vendors are now threatening to liquidate 9Mobile given NCC’s antics. If this happens, it guarantees MTN a huge share of the departing almost 20 million 9Mobile customers.
“Danbatta is clearly not acting in the best interest of Nigeria. This must be very frustrating for the creditors, Teleology and 9Mobile staff,” one of the sources said.