Glo, Airtel, Dangote, Seven Others Advance to Final Stage in 9mobile Bid

  •  Bidders to submit $150m bond

Emma Okonji

The scramble to acquire 9mobile, Nigeria’s fourth largest network operator, has advanced to the next stage, with 10 out of the 16 firms that submitted expressions of interest (EoIs) for the telecoms firm, prequalified by Barclays – the financial adviser to the deal – to proceed to the financial bid stage of the exercise.

Sources conversant with the deal informed THISDAY that the 10 firms, having passed the technical evaluation bid stage, have been prequalified to submit their financial bids for the acquisition of 9mobile.

As part of the financial bid process, the companies will also be required to submit bid bonds of $150 million each as evidence of their capacity to pay for the acquisition of 9mobile.

The companies include Globacom Nigeria Limited, Nigeria’s second largest network operator founded in 2003 by business mogul, Chief Michael Adenuga; India’s Bharti Airtel, operating as Airtel in Nigeria; Dangote Group’s telecoms business unit, Alheri Engineering Limited, which has the backing of U.S.-based Blackstone Group with an investment portfolio of $378 billion and a Nigerian subsidiary called the Black Rhino Group; Smile Telecoms Holdings, a South African telecommunications group with subsidiaries in Nigeria, Tanzania and Uganda; and Helios Towers, the former owner and operator of the largest telecoms tower network in Nigeria and other countries, before it sold its Nigerian infrastructure to HIS.

Other firms that have moved on to the financial bid stage of the competitive tender are: Centricus Capital and Africell, a subsidiary of the Lebanon-based Lintel Group of Companies, with cellular communications operations in the Democratic Republic of Congo (DRC), The Gambia, Sierra Leone and Uganda; Dubai-based Abraaj Capital, a private equity firm with an investment portfolio of $11 billion; Teleology Holdings Limited, a special purpose vehicle led by a former chief executive of MTN Nigeria, Mr. Adian Wood, and Ericsson; Africa Capital Alliance (ACA), a leading pan-African investment firm based in Lagos; and The Carlyle Group, a U.S.-based multinational private equity, alternative asset management and financial services corporation.

A banking source also said that now that the 10 firms have been prequalified to submit their financial bids for 9mobile, this will be the final process from which a winner with the highest bid submitted for 9mobile, will emerge.

The winner, according to the source, will then be invited to negotiate and agree to the payment terms to takeover 9mobile.

Should the firm that wins the financial bid stage fail to meet the payment terms within the stipulated period agreed with Barclays, the reserve bidder (or the firm that submitted the second highest bid) will be invited to acquire 9mobile.

9mobile, formerly Etisalat Nigeria, was put on the block early this year after it defaulted on a $1.2 billion loan from a consortium of 13 Nigerian banks.

The Central Bank of Nigeria (CBN) was forced to intervene to save the company from collapse and prevent creditors from putting it into receivership, leading to a change in its board and management, as well as the new name 9mobile.

The crisis forced the telecoms company’s one-time parent, Abu Dhabi-based Etisalat Group, to terminate its management agreement with its Nigerian business and surrender its 45 per cent stake to a trustee, following the central bank’s intervention.

9mobile’s new CEO, Mr. Boye Olusanya, had said soon after his appointment that he was focused on getting the telecoms company back on track to make a profit, while working on the paperwork to eventually raise new capital, adding that the company was open to new investors.

The 13 banks had put a freeze on collecting the principal and interest payments on the syndicated $1.2 billion loan pending new investors, in order to help the company survive.

The Nigerian lenders with exposure to the telecoms firm had given Barclays the mandate to handle the sale of 9mobile, after Citigroup and Standard Bank, previously in the running for the role, were dropped..
9mobile has over 20 million subscribers with a 14 per cent share of the Nigerian market.

South Africa’s MTN is the market leader with 47 per cent, Globacom has 20 per cent while Airtel has 19 per cent.

  • Owo

    It’s a pity that we don’t have global telecoms leaders, like Vodafone and Orange, bidding for 9mobile. I hope that financiers, like Blackstone or Abraaj, don’t end up buying the company so that we don’t end up with the power sector situation. Glo and Airtel are not good options either having not done well in terms of reliable service. Smile is the best of this lot based on experience and track record.

  • Vanguard

    A home grown company should win this bid. It’s best for the country’s security.

    • Screw-em

      I agree, to ensure the profit is parked in Nigeria rather than financial flight to an offshore domain unfortunately leaving our economy in dire straits.

  • Pluti

    I thought Dangote said he would not invest in telecoms….. always winning with deception

    • Ofuzo

      Dangote group is just a vehicle used by the North to compete with other groups in nigeria. So dangote is not a singular force but a collective entity designed to compete with southern owned businesses. As a matter of fact, dangote group is an elaborate Ponzi scheme. He practically seem to have his fingers in all manners of businesses ie dangote cement, dangote energy, dangote refineries, dangote pegeot car manufacturing, dangote sinotruck truck manufacturing, dangote road construction, dangote power and gas, and now dangote telecoms. Every year dangote make billions and billions of naira profit in an upward trajectory while it’s competitors profit go up and down. Dangote sold one of his food businesses to a South African company. The South African company invested millions of dollars in the company and never made any money. They sold the company back to dangote who went ahead and reported millions of dollars in profit after just one year. There is something very very FISHY with this dangote group.

      • Bolaji Shomekun

        And there is something “fishy” too with privately built companies like Google, Apple, Facebook and Alibaba right? Your root problem is that you don’t believe anything BIG can come out of Nigeria without fraud being involved. Well, you’re entitled to your opinions while the rest of us build the next big conglomerates LEGITIMATELY. Cheers…

        • Ofuzo

          You don’t have to clone a yoroba name to respond to my comments. But look, my name is not ofuzo for nothing, I can see things were other people can’t. It’s impossible to do business especially in nigeria and continuously have an upward trajectory of profits. Larfarge cement and other big companies including banks profits go up and down but never dangote. How can somebody worth only 13 billion dollars be building projects more than his net worth? How is it that other sugar companies all over the world loose money every now and then but never dangote sugar? How is it that another company bought dangote company, invested millions and never made any money, turned around and sold it to dangote which immediately reported huge profits the next year. EITHER THIS DANGOTE GUY IS INVOLVED IN SOME KIND OF PONZI SCHEME OR HE HAS A COMPANY THAT MINTS NIGERIAN CURRENCY.

          • ifeanyi victor

            He is not involved in any ponzi scheme,but rather,croynism and political support by successive nigerian governments to gain monopoly of every business he delves into.
            See what’s happening with Peugeot now,it has been made official vehicle/sedan for almost all federal agencies,just like he was given 70% of total cement import allocation into nigeria for over eight years by obasanjo with others shared among lafarge,golden penny,Bua etc.
            He used that to manipulate cement price to his advantage for years.
            If you know the case of Savannah sugar plant,numan,adamawa state,you’ll weep for nigeria.
            He has been the grand beneficiary of import waiver by obasanjo even while making sure he sold cement at the highest price in the world to nigerians while controlling about 70% import allocations into this country.
            He also took over osogbo machine tools,benue cement,if you notice all these companies from Savannah sugar are government companies.

          • Ofuzo

            I know about some of the monopolistic favoritism he had enjoyed so far but that still doesn’t explain the year on year double digit profits enjoyed by practically all his companies. A classic example or exhibit A if you wish was the company he sold to a South African concern that woefully failed to generate any kind of profit even after they invested millions of dollars on it. But lo and behold, that same company announced millions of dollars in profit just after one year of him reaquiring it. Some people will classify that as the dangote magic but am not buying that bullshit.

          • KlasJ

            It may also be that he knows how to do business in Nigeria, ‘Nigeria way’

            Vodacom of South Africa failed in Nigeria while MTN of South Africa succeeds massively.

            Woolworth of S.A. regretted ever coming here but Shoprite of S.A is now our flagship in supermarket that any governor that fails to attract it to his state is deemed a failure.

            The same Dangote took on Dufil in noodle business but had to succumb to the superior acumen of the ‘indomie noodles’ master by selling his noodle business to the Indians.

            The same Indian owned Dufil is making waves in pastries line with its mini-mini chin chin.

            Don’t overate some of these South African companies. Many of them can only operate successfully in standardized environment that go by textbook definition of best practices.

          • Bolaji Shomekun

            God bless you for stating the obvious. It’s ludicrous for Mr Ofuse to assume because it worked with Mr Dangote instead of with someone else, that there’s some diabolical twist to it. Heck, Mr. Dangote has himself invested into several things which have failed, and those business segments just quietly went moribund.

          • Bolaji Shomekun

            Oh the depth of your folly…

        • ifeanyi victor

          Mr,dangote’s history is an open book,unless you want to deceive yourself.
          They’ve used cronyism and political interference to destroy businesses in nigeria.
          What the guy observed is largely true.
          Nigerian state discriminates among it’s citizen in business.
          Go and look at the mess they’re making of ALSCON,even now using a Cantata to wrestle the company from the rightful winner of the bid for ALSCON in favour of RUSAL that they’re in afterthought illegal alliance with.

          • Ofuzo

            I also know about alscon and others and I agree with you entirely about the under handed moves that the Nigerian government makes to undermine igbo owned businesses. This misfortune have befallen some people like ibeto cement that was shut down by obasanjo. Not done with ibeto, the same obasanjo then went ahead and shut down the largest airline in nigeria, slok air owned by orji kalu. Fast forward to 2015 and another igbo man allen onyema founded air peace airline. Guess what I just heard on the news? The federal government is now trying to start a national carrier!!! Obiejesi Azudialu about 3 years ago built the first dry dock facility in nigeria to service ships. Guess what? Nimasa just announced that they have built one on behalf of the federal government. Oh yeeees, there is a design in nigeria to kill Igbo businesses before they become local champion. That’s also why they have not implemented the auto policy initiated by good luck Jonathan because only the igbos have developed the capacity to control it.

          • Bolaji Shomekun

            Lol. I see where all this warped ideas are stemming from. Another Igbo man who thinks he’s being marginalised. Wake up and smell the coffee my friend. There are hundreds, nay – thousands of HUGELY successful Igno entrepreneurs, just as there are millions of poor Hausa business men. Using government connection to facilitate business growth has and will always be a part of global business. If you think Mr. Dangote has leveraged on this to grow his companies, oh well, it’s kudos to him for doing what others couldn’t.

          • Ofuzo

            Why didn’t you focus your response on the points I made by addressing them? Did the Nigerian government not shut down slok airlines of which orji kalu 2 years ago instituted a multi billion naira lawsuit against them? Did the Nigerian government not close down ibeto factory in Port Harcourt of which he won a lawsuit against them? Didn’t the Nigerian customs not delay the unveiling of INNOSON made cars by almost one year when they confiscated his consignments using an escuse manufactured by guarantee trust bank? Did the Nigerian government right now as we speak not trying to wrestle alscon from the son of jaja of opobo even after he’d won a lawsuit against them? Didn’t you just hear on the news a couple of days ago where the minister of aviation was qouted as saying that the Nigerian government is in negotiation with airplane manufactures to help them start a national carrier? Is it not true that when the auto policy was announced by Jonathan, other than the Indian man who owns Volkswagen, and the pegeot owned by northern interest, the rest of the car assemblies in nigeria will be owned by the igbos eg innoson, globe Motors, coscharis, annamco, peace mass transit and the company responsible for the manufacture of TATA trucks and bus? Is it true or not that nimasa have just announced that they have assembled a drydock facility that is getting ready to be towed to nigeria? Do you think it’s a coincident that the Nigerian government is all of a sudden trying to float an airline and a drydock facility which is right now being dominated by two Igbo men? Is it not true that the Nigerian government have SPECTACULARLY failed in every industry it has managed? If the Nigerian government have SPECTACULARLY failed in every industry it has set up, why is it trying to set up new ones? Don’t we know the answers to that or are you pretending not to know. THE CONSPIRACY TO KEEP IGBOS DOWN IN NIGERIA IS VERY WELL KNOWN, and this what has kept nigeria from developing. That is why nigeria will always remain a total and absolute shithole country.

    • KlasJ

      Alheri Engineering Limited owned by Dangote (and now bidding for Etisalat) won 3g licence alongside mtn, Globacom and celtel (now Airtel) in 2007.

      It later sold the 3g licence to Etisalat because Etisalat didn’t participate in the 2007 bidding and needed 3g licence to compliment its gsm (2g) licence in order to compete with others.

      Alheri still remain a communication company, so, how could Dangote claim he wouldn’t invest in telecoms?

      • Ofuzo

        He explicitly said that in one of his recent interview and the reason he gave for not doing so was because that line of business is not profitable.

        • KlasJ

          I did not doubt you. I was just wondering why he should claim so when we know his recent history in telecoms business.

        • Bolaji Shomekun

          …and now that he has changed his mind, he doesn’t have a right too? Pray, tell me, what if it was even purposely diversionary from him to tell people he wasn’t interested? How is that any of your or my business. Free Mr Dangote and build your own life my dear friend. #DropsMic

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  • Curtx Maccido

    Dangote group – Telecom unit? Na wa oh!