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Can 9mobile survive managing Barclays crisis before end of 180 days?

As part of efforts to hold back what would have been a bad end to the business activities of Etisalat, now 9mobile, the combined drive of the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC), in July this year, rallied intervention and saved the businesses and lives of more than 20 million Nigerians who depended on Etisalat.

However, the timely intervention did not come without a caveat; otherwise, the new board led by a Deputy Governor at CBN, Dr, Dr. Joseph Nnanna to position the troubled firm and sale within a period of 90 to 180 days so that the consortium of banks will have their trapped fund. The condition was handed down to 9mobile in July and by the end of November, it will remain just one month to December 31st, the terminal date of the current ad-hoc management team.

Already, a credible source in one of the creditor banks confided in our correspondent on Tuesday, that many of the banks are really running out of patience.

CBN Governor, Godwin Emefiele made it clear before the new ad hoc board to work out a sustainable transition process that will deliver seamless acquisition or merger as the case may be, saying “The current board of the telecom company is interim and not supposed to last beyond 90 to 180 days from inception”.

On why CBN hurriedly intervened, Emefiele said: “We expect that businesses should operate profitably, but we also expect that whatever decision they take should not hurt other important stakeholders in that industry. Etisalat, now 9mobile is one of the four biggest companies in the telecommunications industry in Nigeria with subscriber base of over 20 million. Of course, we also know that the revenue base of the company is very robust”.

“Etisalat employs over 4000 people and if you understand the likely impact of an adverse consequence of losing the company on the lives of these 4000 people directly and indirectly, it is important that we do not allow any creditor that feels disadvantaged to take a decision that negatively affects other stakeholders.”

Currently, a twist is emerging in the whole matter as Barclays Africa has pulled out as financial adviser over the sale of 9mobile for the consortium of the 13 lender banks after CBN and NCC jointly queried the bank’s transparency in the bidding process of the telecom.

Though Barclays Africa is yet to issue any statement to this effect, it would be recalled that the consortium of creditor banks to the telecommunications firm, had in October appointed the bank to midwife the sale process.

The new trouble had started when Barclays Africa, the financial advisers, came under attack from the two intervening federal agencies.

In a joint letter to GTBank, which is the facility agent for the 9mobile syndicated loan, the executive vice-chairman of NCC, Umar Danbatta, and Godwin Emefiele of CBN, expressed displeasure with the “unwillingness of Barclays Africa” to follow due process in the bid.

In the letter, dated November 4, 2017, the two regulators said they made it clear from the outset that the sale process must be “transparent and fair, with the financial and technical capabilities of the final bidders without question”.

According to CBN and NCC, there is “serious concerns” since the appointment of Barclays Africa as financial advisers.

“They have repeatedly exhibited signs of opacity in the sale process for 9mobile. Given the overriding public interest in the company and the need for transparency, we advised that Barclays advertise the call for ‘expression of interest’. Barclays declined, insisting instead that the company being a private one, should not be taken through a public sale,” they wrote.

“This lack of a transparent process has proven to be selective and arbitrary, leading to allegations that the process is being teleguided to a rigged and predetermined outcome. The CBN and the NCC will not fold their arms and allow this to materialise.”

Besides, both NCC and CBN averred that they had received reports and petitions from various stakeholders, including some bidders, which have further heightened their concerns— but their suggestions to the board of 9mobile and Barclays on how to restore credibility to the process, have been ignored.

The CBN and NCC then directed that all steps and decisions taken by the financial advisers as well as other advisers from the end of “expression of interest” must be communicated to CBN and NCC, who will have to approve every step in writing.

The duo also made it clear that the final bid process must be “open and transparent” in line with international best practices.

Already, both Danbatta and Emefiele have said the December 31, 2017 deadline for the handover of 9mobile to the preferred bidders “remains sacrosanct”.

Industry analysts and financial advisors who spoke to our correspondents on the matter, fear possible default in meeting with the deadline of December 31st.

By end of November, it will only remain one month to either consummate the sale deal or declare 9moblie, bankrupt and insolvent.

Observers say with the new twist which may end up in shopping for another advisor, the remaining days to the termination date of December 31st may not be enough to clear the mess, begin fresh arrangement and complete the sales.

Experts say Barclays pulling out means the entire process will have to be repeated from scratch. The telecommunications firm may have to remain under the supervision of the regulators.

But what is not yet clear is how the creditor banks whose funds had been trapped will welcome the new development at a time given deadline is by the corner.