Last week Teleology, in a statement, said it was pleased to announce the constitution of a new Board of Directors for 9mobile
After a long process of acquisition of 9mobile, Teleology Holdings Limited last week finally received approval to take full ownership of the company, 10 months after Barclays Africa, the financial adviser handling the sale of the telecoms, announced the firm as the preferred bidder.
Recall after announcement, Teleology that could not take over 9mobile because it was yet to get the letter of ‘No Objection’ from the Nigerian Communications Commission (NCC), the regulator.
The Executive Vice Chairman of NCC, Prof. Umar Danbatta, had said NCC needed to conduct due diligence on Teleology Holdings to ascertain its technical competence in managing 9mobile.
He later confirmed the due diligence had been conducted and the report submitted to the NCC board, but that the board was yet to decide on it.
But, last week Teleology, in a statement, said it was pleased to announce the constitution of a new Board of Directors for 9mobile, following the successful completion of the tenure of the former board appointed by the Central Bank of Nigeria (CBN) and in fulfillment of the consequential transfer of final ownership to the new investors, Teleology Nigeria Limited.
In the statement by Mohammed Edewor, the company said, “We thank all out-going members of the Board for helping to shepherd 9mobile through the critical transition phase it has passed through since July 2017.
“For us, the composition of the new Board of Directors is another significant milestone, and this follows the issuance of final approval of no objection by the Board of the Nigerian Communications Commission (NCC) to the effect that the technical and financial bids which Teleology submitted for 9mobile met and satisfied all the regulatory requirements. This is indeed the dawn of a new era in the evolution of 9mobile brand in the Nigerian market.”
The new Board of Directors are: Nasiru Ado Bayero (Chairman), Asega Aliga (Non Executive Director), Adrian Wood (Non Executive Director), Mohammed Edewor (Non Executive Director),Winston Ndubueze Udeh (Non Executive Director).
Others include; Abdulrahman Ado (Executive Director), Stephane Beuvelet (Acting Managing Director).
The new Chairman of the Board, Alhaji Nasiru Ado Bayero welcomes the appointment stating that, “as we begin this new epochal phase, we wish to thank all the employees who built this viable business. Our debt of gratitude also goes to our subscribers even as we assure them to get ready for real best-in-class additional value for their relationship with the 9mobile brand. Without you, there could not have been a 9mobile business for us to invest in today. We will justify your confidence in our brand by making significant investments that will improve the value you get for using 9mobile.”
The CBN in July last year in collaboration with the NCC, had appointed a Board of Directors chaired by Dr. Joseph Nnanna, the Deputy Governor of the Central Bank of Nigeria, to oversee the affairs of the company pending the completion of regulatory due diligence of the bid documents submitted by Teleology and 16 others for its acquisition.
Like Phoenix, recall that 9mobile rose from the ashes of the defunct Etisalat which, in order to boost its infrastructure in the competitive market that has MTN, Globacom and Airtel as competitors, it approached a consortium of local banks and got a $1.2 billion medium-term seven-year facility.
The repayment modality for the loan was not in the public space until the economic downturn of 2015 which led to sharp devaluations of the naira, a trend that negatively impacted the value of the dollar-denominated loan. The situation was aggravated by CBN policy, which restricted access to foreign exchange. That policy forced many firms to abruptly closed shop.
According to the telco, the outstanding loan to the consortium stood at $227 million and N113 billion, a total of about $574 million if the naira portion is converted to United States (U.S) dollars. By implication, almost half of the original loan of $1.2 billion has been repaid.
Etisalat continued to service the loan until February last year, when discussions began with the banks on how to restructure the repayment. Engagements to renegotiate the terms of the loan went on and were yet to be finalised, though at an advanced stage until everything went sour which prompted CBN and NCC intervention, thus, the sale of 9Mobile.
When the opportunity to invest in 9mobile came in 2017, Barclays Africa was appointed to handle the sale through a transparent auction process.
At that time, the former CEO of MTN Nigeria, Adrian Wood, who became the face of Teleology in Nigeria led Teleology Holdings to bid for 9mobile.
After due consideration, based on the technical competences and financial capabilities to manage 9mobile, Barclays Africa announced Teleology Holdings as the preferred bidder and Smile Telecoms Holdings as the reserve bidder, among 16 contenders who initially submitted bid for 9mobile.
Letters were transmitted to both final contenders on February 21, 2018, informing them of their positions in the sale of 9mobile.
The letter also directed Teleology Holdings to make a non-refundable cash deposit of $50 million within 21 days from the date of the letter, dated February 21, 2018, or stand the chance of losing the bid to the reserve bidder, which is Smile Telecoms Holdings.
After the payment of the initial $50 million deposit, Teleology was expected to pay the remaining balance of $251 million, to complete the $301 million it proposed during the bid process to acquire 9mobile.
Teleology was mandated to pay the balance of $251 million within 90 days, beginning from March 21, 2018, which was the deadline to pay the $50 million non-refundable cash deposit. Determined to take over 9mobile, Teleology Holdings met both payment deadlines, but had to patiently wait for months before approval was eventually given for its total ownership.
So, with the emergence of the new Board, the long process for the acquisition of 9mobile has reached a definitive end marking the beginning of a new era for the telecommunication company.
Reacting to the development, stakeholders commended the NCC and CBN on the role they played in the whole process of acquisition adding that the new owners have a task to inject life into the telecommunication company to ensure it meets with the stiff competition in the sector.
The National President, Association of Telecommunication Companies of Nigeria (ATCON), Olusola Teniola speaking to this reporter said, “It is very encouraging that finally, the transaction involving 9mobile and Telology has now been concluded. We are relieved that NCC and CBN were able to stage off what could have been a systemic failure in the telecommunications and wider industry. So, we are first very happy that it has now been concluded with the transfer of new directors into 9Mobile board. As we are happy about the situation, we are concerned that the process was long, it has been more than a year since the former owners of Etisalat left Nigeria and though we have new owner of 9Mobile, it is very much evident that there have been lost of subscribers and also there has been some uncertainty around the direction that 9mobile will take to regain the lost subscribers and also the time that has elapsed since new equity has been put into the business, to grow the business, to catch up with the leading mobile operators such as MTN, GLO and Airtel. So, with that we suggest that the new owners quickly put in a turnaround strategy within the next 100 days that reassures all the stakeholders, the regulators, supply chain, and other stakeholders in the business including the employees that there is more injection of capital and funding into 9mobile and also it is going to be very key that the new management of 9Mobile brings in experienced hands as executives into the business because as you know, the telecommunication industry in Nigeria is very dynamic and very difficult to operate in and it will require experienced personnel to ensure the success of the turnaround strategy and also it will be good for the company to demonstrate to consumers that it has a clear strategy of what it wants to bring to reignite the telecommunications industry in the way of media publication, of promoting the new identity of 9mobile and also improve the quality of service.”
Mr. Jide Awe, Chairman Conferences Committee, Nigeria Computer Society (NCS), explained that the takeover by Teleology is not unusual. He said, “There are issues with the 9Mobile that I think most of us are aware of. So, basically, it is not just an unprofessional takeover, they must have injected fund into it and they now have the ownership.
According to him, telecommunications industry is a critical part of the economy, and should not be allowed to die.
He further commended the CBN and SEC for the role played, adding that the entry of the new investors will stabilise 9mobile again. He also expects that Teleology’s investment in 9mobile would stir competition in the telecom industry. “For an acquisition to take place, it means that the acquired company was going through some challenges. It is expected that the investor will invest more in the business and try to strengthen it to be more vibrant. “We hope that the investment will filter some competition in the telecom market in the country. I believe that they (Teleology) will have a plan to overhaul the place.
“So, what I will advise them to do is for them to be strategic in terms of putting out all those things they can do to be a viable competitor in the telecommunications market and the best way to do that is to look at your customers, what are the issues that they are facing? The issues of quality of services, cost of service. They have to do a kind of super re-engineering and try to carve a niche for themselves. We don’t expect them to start copying other competitors but try to see gaps that most of them have not satisfied then try to fill those gaps. I know that it will endanger some people, losing of jobs, some people may lose jobs so I will now advise that they should do things that will create employment,” Awe said.
Also, Mr Rogba Adeoye, a former President, Information Technology Systems and Security Professional, said that the acquisition showed confidence in the Nigeria’s telecommunications industry. “It means that Nigeria is a good market. “We expect the investor to roll out in time because the telecom market in the country is very competitive.
They are also aware of the challenges. “They need to be brisk to retain or recapture their market and even get more,” he said. Adeoye also urged the new investor to introduce innovations that would expose the country to new trends. He said that innovations would lead to a desired competition in the industry as old players will not sit down and watch them.”
The Chairman, Association of Licensed Telecommunications Operators of Nigeria (ALTON), Mr. Gbenga Adebayo, said it would have been a big setback not only to 9mobile, but also to the entire telecoms industry, if Teleology was denied the full ownership of 9mobile, after he was declared the winner of the keenly contested bid process.
“We were all expecting Teleology to take ownership of 9mobile, having been announced as the preferred bidder, but now that it has received the nod to take full ownership control, I urge Teleology to do its best in turning around the telecoms company into profitability,” Adebayo said.
President, National Association of Telecoms Subscribers (NATCOMS), Deolu Ogunbanjo said: “I am happy and the entire telecoms industry is happy that Teleology has been given the right to take over 9mobile. This is what we have been expecting, and we believe that the approval would put an end to possible job loss, drop in telecommunications contribution to GDP, and setback on the telecoms sector, which the delay would have created.”