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Just as several sponsored campaigns of calumny are firing the preferred bidder of embattled 9mobile, Teleology Holdings Limited from every angle, a usually dependable source in the company has brushed aside all the media war, saying the company has all it takes both technologically and financially to return 9mobile to stability.
Latest media campaign against the company tends to pitch Teleology management with the consortium of banks whose syndicated loan of about $2.1bn sparked off the bankruptcy crisis in the first instance.
Part of the ongoing campaign says the banks were concerned about the sustainability of 9mobile post-acquisition due to its huge debts, low margins, dropping subscriber base, and lack of capital investment, saying “The banks are of the belief that these limiting factors would impede the repayment process”.
However, in a report released by Renaissance Capital (RENCAP), the banks, in their 9th Annual Pan-Africa Conference held in Lagos on 16-17 May, expressed worries that even if Teleology paid down part of the loans, 9mobile would still find it difficult to compete with the likes of MTN, Airtel, and Globacom – all direct competitors who have deeper pockets and have been ramping up CapEx spend and eating into 9mobile’s subscriber base.
The report averred that “We are cautiously optimistic on the overall Non-Performing Loan (NPL) outlook for the sector.
“On more specific NPL issues, we discussed the ongoing sale of 9mobile, which also attended our conference.
“According to 9mobile management, its $1.2 billion outstanding loan has been negotiated down to $800 million, of which $301 million is due to be paid by the new investor, Teleology, on June 30, 2018.
“We believe the sale will likely close, although the time-frame may stretch beyond 1H18.
“Our bigger concern is the sustainability of the business beyond the sale, given that the $500 million balance of the outstanding debt will be restructured over an eight-year period, including a two-year moratorium.
“9mobile has lost subscribers, its margins are under pressure, and lack of capital investment has made it less competitive than peers. Repayment will, therefore, hang in the balance for some time, in our view.”
Analysts who are in the know of Teleology Holdings management plans, say strategic arrangements have been structured to meet all needed responsibilities in repositioning the telecom as soon as complete takeover of 9mobile is done.
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