9mobile Deadline Passes, but Deal Imminent

The deadline has passed for 9mobile’s would-be new owner to pay the US$450 million it owes to complete the takeover deal, but local news sources say it will go ahead soon regardless.

Teleology Holdings paid a US$50 million deposit for Nigerian mobile operator 9mobile in March and was due to transfer the balance of the agreed $500 million purchase price within 90 days.

According to the News Agency of Nigeria, that gave it until 30 June to make the payment. However, it cited an unnamed source close to Barclays Africa, which is involved in the sale process, as saying that Teleology had requested an extension of 20 working days to hand over the money.

A separate source from the Central Bank of Nigeria said that the possibility of an extension was provided for in the purchase agreement and that the country’s regulator had agreed to it on the condition that Teleology pay another non-refundable instalment of $50 million.

The news agency said regulatory body the Nigerian Communications Commission (NCC) has confirmed that Teleology is in the process of raising funding that actually exceeds the amount it owes to finalise the 9mobile deal.

An unnamed official at the NCC said Teleology plans to finance the rollout of more than 5,000 new base stations and is looking at acquiring other minor players in the Nigerian telecoms market to bulk up 9mobile.

Nigeria’s four main GSM-based mobile network operators together served 162 million subscribers as of May, according to NCC statistics. MTN leads the market with 66.5 million, or 41%, while Globacom and Airtel are virtually neck-and-neck with 39.9 million and 39.7 million respectively. 9mobile is considerably smaller than its rivals with a subs base of 16 million.

9mobile was known as Etisalat Nigeria until July last year when it took on its new identity after former parent Etisalat missed a $1.2 billion loan repayment deadline and forfeited its stake. Control of the company passed to its lenders.

The operator attracted 16 suitors when it went up for sale, with a short list of 10 emerging in November. Teleology was named as the preferred bidder, while Smile Telecoms was appointed as reserve bidder should a deal with Teleology fail to materialise. – Total Telecom