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Not all 10 interested buyers of 9mobile have met $100m bank guarantee

Indications have emerged suggesting that not all 10 listed potential investors (names with held) who qualified for the next stage in the bid process for 9mobile telecommunication, formerly Etisalat, complied with the tendering of a bank guarantee (or bond) of at least US$100 million last week.

According to the laid down sales procedures, the bond is as part of proof of interested company’s financial capacity to buy the company.

Though efforts to get the voice of a top official at 9mobile failed on Sunday evening, a source in the know of the sales process confided in our correspondent that not all have complied but was quick to say that “it is too early to say that an investor or investors have backed out”.

The source further noted that the crisis rocking the transaction advisor will not deterred any of the stages in the ongoing sale process either and revealed that “Quite a substantial number of interested bidders have complied to the bond issue but not all”.

Business Hilights had last week reported that 10 telecom groups led by grandmasters of data, Globacom Nigeria Limited, and nine others including local and foreign entities are now confirmed in the race to buy over embattled 9mobile.

Others listed in the race include Bharti Airtel, Alheri Engineering Limited, Smile Telecoms Holdings, Helios Towers, Centricus Capital, Africell, Abraaj Capital, Teleology Holdings Limited, Ericsson, Africa Capital Alliance (ACA) and The Carlyle Group.

An industry analyst who pleaded anonymity said “I find it very difficult to see Etisalat solving this debt crisis alone and the parent company has come and gone, nothing happened.

“Now, look at it from this angle, the banks are madly in need of their money and they are not laughing at all. Yes, the presidency, Minister and NCC can come and say one thing or the other, the fact remains that the company owes some people who need their money urgently.

Corroborating this analyst, an insider in some of the deal who pleaded anonymity said “To me, it may not be out of place for Nigerians to hear one day that Globacom is putting down some money to buy up the company to drive capacity consolidation after all.  I think that will be a good buy. It will help sort out the banks who are need of their money and rest the matter once and for all.

“Like I said earlier, if that happens, it will not be the first telecom company to be sold and bought in Nigeria. Remember Visafone, it was sold. So if you ask me, I will tell you that if Globacom goes there, it will be a better deal for the entire industry.

“Remember, if Glo buys 9moblie, it will effectively take over the lead in the industry as the telecoms with the highest number of subscribers because if you add together the current Globacom subscriber base and that of 9moblie the total will knock out MTN Nigeria.

Globacom has a natural advantage to raise enough funds to buy Etisalat; that is if it does not currently has the needed deep pocket to do that now. Moreover such acquisition will smartly shut up the company’s capacity, global rating and service delivery including coverage and tailored services. Recall that mergers and acquisitions are possible in any sector, it has happened in banks some years ago and nothing is bad about it in telecoms.

“On Dangote Group coming in, I think the group is still watching the telecoms industry even though it has some time ago bought a frequency and later sold to the same Etisalat, I think one need to find out if he is still looking at telecoms for now.

In his further submission, the expert said “I think Glo is good to go if it decides”.

The telecoms company formerly known as Etisalat Nigeria changed its brand name to 9Mobile in July after the Mubadala Group, the major investor from the United Arab Emirates, pulled out of Nigeria’s fourth largest mobile operator following a N541 billion debt.

The debt is owed to a consortium of 10 banks, with GTBank acting as the facility agent.

The sale of 9mobile, with 21 million subscribers, is expected to bring in the needed capital to restore it to good health to become competitive once more.

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