Nigeria Communication Commission NCC is putting finalising touches to a deal on investment firm Teleology Holdings’ planned takeover of 9mobile and the deal is expected to close soon. The Board of 9mobile said it has has agreed to an extension of the timeline for closure of the acquisition process. A statement issued from 9mobile office, and signed by Boye Olusanya, Chief Executive Officer of 9mobile said that the timeline extension was considered necessary to enable parties involved in the sale process to finalise the requisite transaction documentation to facilitate a smooth closure and transition to the new investor.
The statement said “the Board of 9mobile is pleased with the progress made thus far and expects the acquisition process to be completed as soon as possible. Further updates in this regard will be provided in due course, the statement said. The statement went on to thank its customers for their support and reiterated its continued commitment to providing best-in-class telecommunication service”. It will be recalled that the process for the acquisition of 9mobile commenced in October 2017. It is being supervised by Barclays Africa, the transaction adviser appointed by the CBN, the Nigerian Communications Commission (NCC) and the consortium of 13 banks.
The aim is to get new investors to inject fresh capital into the telecom firm. The bid for the sale of 9mobile equities followed disagreement between Emerging Markets Telecommunication Services Limited (EMTS), formerly trading as Etisalat Nigeria, and the banks to restructure the repayment of a seven-year mid-term facility secured by the telco to service an existing loan and expand its network in 2013. Teleology was picked as preferred bidder for the country’s fourth biggest telecoms operator in February, following a bid process arranged by Barclays Africa, after a debt default forced 9mobile’s bankers to step in. The sale has taken longer than initially expected. The Nigerian Communications Commission (NCC) is in the final stages of reviewing the deal before signing off Teleology’s takeover, the sources said, adding that $301 million in financing for the deal is in escrow with Afrexim bank.
“The NCC is doing its own regulatory due diligence before making a formal announcement on transfer of licence,” one of the sources involved in the deal told Reuters. The source said the documentation with the NCC was not complete and the banks were preparing final papers. “(It) should close in another week,” the source added. The NCC has to approve a transfer of 9mobile’s telecoms license to Teleology. Earlier 9mobile, formerly called Etisalat Nigeria, said its board expected the takeover to be completed “as soon as possible” but that more time was needed to ensure a smooth transition, without giving further details.
The telecoms firm had been in meetings with its lenders, regulators and the new investor for the last few days. The prospective buyer was given 90 days to pay the balance of $450 million to complete the acquisition after paying a non-refundable deposit of $50 million in March. Another source said Teleology, which was set up by 12 telecoms industry veterans led by ex-MTN Nigeria executive Adrian Wood, is waiting for 9mobile’s lenders to obtain clearance from the NCC and Securities and Exchange Commission.
“The board of 9mobile is pleased with the progress made thus far,” said its Chief Executive Boye Olusanya. Teleology has partnered with East Africa’s largest telecoms operator, Safaricom, to transform 9mobile. However the takeover comes at a time of increased competition as Nigeria’s biggest operator, South Africa’s MTN, expands its service through partnerships with banks. 9mobile has lost subscribers. In October, it had 17.1 million users, a 12.2 percent market share, which was down from 20 million subscribers, or a 14 percent share, earlier in 2017, NCC data showed.
