The Nigerian Communications Commission (NCC), the telecoms industry regulator has insisted it must carry out due diligence on Teleology Holdings Limited, the preferred bidder for the sale of 9mobile, in order to ascertain the technical capability of the company.
The Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, who made the disclosure during a media interactive session in Lagos this week, said the move became necessary in order to ensure that Teleology Holdings Limited has the technical expertise to manage a national telecoms company like 9mobile.
Danbatta however said the due diligence would not begin until Teleology gets a clean bill from the Central Bank of Nigeria (CBN), showing that it has met all its financial obligations to acquire 9mobile.
Although Teleology had on March 21, crossed the first financial hurdle, when it paid $50 million non-refundable cash deposit, as demanded by Barclays Africa, the financial adviser handling the sale of 9mobile, said it however needs to cross the second financial hurdle by making another $450 million payment to complete its $500 million bid price for 9mobile.
Teleology was given 90 days from the March 21 date, which will elapse by July 25, to make the second payment.
According to Danbatta, NCC would wait until Teleology has concluded all the financial obligations, before it would commence due diligence on the technical capability of Teleology, which will be immediately after July 25, 2018.
Danbatta insisted that unless Teleology Holdings scales through the technical evaluation, it would not transfer the license and spectrum of 9mobile to Teleology Holdings.
The implication of all these is that should Teleology fails to meet up with the $450 million payment or should it be financially buoyant to pay the remaining amount but could not meet up with the evaluation on its technical capability, 9mobile will be given to the reserve bidder, Smile Telecoms Holdings, who appear battle ready to acquire 9mobile whenever the opportunity comes.
9mobile, formerly known as Etisalat Nigeria, became the fourth entrant into the GSM space in Nigeria, when it rolled out its commercial services on October 23, 2008.
But for want of network expansion, the telecoms company in 2013, approached a consortium of 13 local banks for a loan of $1.2 billion for network upgrade and expansion.
However, citing economic downturn of 2015-2016 and naira devaluation, which negatively impacted on the dollar-denominated component of the loan, the former Etisalat Nigeria, fell short of repaying the loan, a situation that compelled the banks to plan possible takeover of the telecoms company.
After failed negotiations between the telecoms company and the banks, Emirates Telecoms Group Company (Etisalat Group), pulled out of the shareholding structure, followed by the six Mubadala and Etisalat Group-appointed Non-executive Directors (NEDs), all nationals of the United Arab Emirates, who resigned their appointments. Shortly after that, came the resignation of the former board chairman, Mr. Hakeem Bello-Osagie, who is a Nigerian. This was again followed by the resignation of the then CEO, Mr. Mathew Willsher and several management staff of the telecoms company, before the decision to sell 9mobile to core investor, came up.