- Adrian Wood: Weâ€™ve taken over 9mobileâ€™s loans, will create a Nigeria-centric telco
Teleology Holdings wednesday beat the deadline stipulated under the bid process for the acquisition of 9mobile by paying a $50 million non-refundable deposit for Nigeriaâ€™s fourth largest network operator.
Teleology, which emerged the preferred bidder for the 9mobile transaction on February 21, was given till today to pay the non-refundable deposit, failing which Barclays Africa, the transaction adviser, would have invited the reserve bidder, Smile Telecoms Holdings, to takeover 9mobile.
Having successfully paid the $50 million, Teleology is expected to pay the balance of its $500 million bid for 9mobile in the next 90 days, in order to take full possession of the telecoms firm.
Teleology was said to have paid the $50 million from Keystone Bank, with United Capital Trustees Ltd and United Bank for Africa (UBA) Plc as beneficiaries.
Teleology, which floored telecommunications giants like Globacom, Bharti Airtel and Dangoteâ€™s Alheri to win the bid for 9Mobile, also on Tuesday moved a step closer to taking over the troubled telecoms company, when it signed a memorandum of understanding with the Central Bank of Nigeria (CBN) and 9mobile to take full possession of the firm.
A source close to the company told THISDAY that Mr. Mohammed Edewor signed the MoU on behalf of Teleology, while representatives of the Nigerian Communications Commission (NCC), the telecoms industry regulator, and the banks witnessed the signing.
Providing more insight on the transaction, the former CEO of MTN Nigeria, Mr. Adrian Wood, who led the Teleology bid for 9mobile, said his group mobilised the $50 million last week, after which the transfer was effected to United Capital Trustees and UBA.
â€œOnce the transfer was confirmed, we got a receipt from the trustees confirming payment.â€
Wood, who spoke to THISDAY on the phone from London, also explained that all contractual documents for the 9mobile transaction had been executed by all the parties.
â€œThe Share Purchase Agreement has been executed, so has the Loan Purchase Agreement.
â€œWith the execution of the Loan Purchase Agreement, Teleology will take over the loans of the 13 banks from 9mobile in exchange for a payment plan.
â€œThis means that 9mobile will have no loans on its books and no longer owes the banks since Teleology has assumed the loans. This also means that 9mobile will have a shareholder loan,â€ he said.
Wood, who after the conclusion of the deal will assume the position of executive vice chairman/CEO of 9mobile, also said Teleology under the Loan Purchase Agreement had commenced the repayment of the $1.2 billion loan owed the banks.
â€œWe have started paying in consideration for taking over the loan portfolio. About half of the loan would have been paid by the time we takeover 9mobile, and we will continue with payments into the future,â€ he said.
The incoming 9mobile CEO also revealed that in addition to paying the balance of its bid price for the telecoms firm, Teleology will over the next four to six weeks focus on getting regulatory approval for the acquisition of the firm.
Also opening up the faces behind Teleology, Wood said the company is a Gibraltar-registered firm made of 12 international and eight Nigerian shareholders.
The eight Nigerian shareholders, he added, come from all sections of the country, saying: â€œThree are from the North-west (two from Kano and one from Katsina), one from North-central (Kogi State), one from the South-east (Anambra State), two from the South-south (Delta State), and one from the South-west (Osun State).
â€œThe shareholders will be unveiled once the transaction is closed, and with the make up of our shareholders, our intention is to make 9mobile a Nigeria-centric operation.â€
He also said the incoming executive management team put together by Teleology has a combined 374 years experience working in the telecommunications sector.
â€œWe have 12 executives coming in and they comprise five of my former colleagues at MTN such as the ex-CTO and ex-CFO. Others include executives from Orange, Vodafone, Celtel and others.â€
On the financial backbone for its takeover bid, Wood said Teleologyâ€™s financial support is coming from Afrexim Bank as well as UBS, which is raising equity from international and Nigerian banks.
â€œAnother distinguishing feature of our bid is that Teleology has formed an alliance with Safaricom, the biggest mobile operator in East Africa.
â€œThe advantage of our alliance with Safaricom is that this would enable us to tap into M-pesa for mobile money services,â€ he said.
9mobile, formerly Etisalat Nigeria Limited, was put on the block last year after it defaulted on a $1.2 billion loan given to it by a syndicate of 13 Nigerian banks.
Following the debt default, its Abu-Dhabi based investor â€“ Etisalat Group â€“ relinquished its shares to the receiver-manager appointed by the banks and pulled out from the Nigerian subsidiary.
9mobile said it was unable to meet the payment terms due to naira devaluation and the economic recession.
However, the NCC and CBN stepped in to prevent the banks from taking over the telco.
Subsequently, a new management and board were appointed for 9mobile and Barclays Africa appointed by the banks to handle its sale to a new investor.
The NCC had earlier written to the CBN, reminding the latter that it would only issue an operational licence to any preferred bidder that has the technical know-how to manage 9mobile.
NCC also said the company that acquires 9mobile should have adequate technical infrastructure on the ground and expressed concern in its letter that it appeared that the creditor banksâ€™ only focus was on the repayment of outstanding loans, while the interest of the commission was in the continuity of the company for the betterment of the telecoms industry, subscribers, labour force, and the interest of Nigeria as a whole.
NCC cautioned that its board would not allow what happened to Etisalat to repeat itself, adding: â€œTherefore the board will scrutinise the technical capability and pedigree of whatever company/companies are recommended as preferred bidders as regards their records in the immediate past three to five years before any of them is considered qualified to be issued a licence.â€