Is 9Mobile really looking for investors?

9mobile

After changing its name from Etisalat Nigeria to 9Mobile Telecom, Nigeria’s fourth largest mobile carrier said it is open to new investors.

The company had in the last three months faced a tough operating condition after its erstwhile investors- Abu Dhabi-based Etisalat Group and Mubadala Development Company PSJC backed out of the company.

Boye Olusanya, the company’s new chief executive officer, said at the unveiling of the company’s new brand identity that:

“Like any business, we are always available for someone with a good offer. We are prepared to manage this business for the long haul. This brand was not developed with the mindset that it’s a three-month brand.”

He added that: “If at any point in time someone does come in with an offer that is attractive then that person will have the right to do whatever they want to do with the brand.”

Boye’s pitch to local and or foreign investor might not get immediate traction bearing in mind how 9Mobile got to its current condition. It would be recalled that Etisalat Nigeria failed to meet its financial obligations for its USD1.2 billion syndicated loan it borrowed from 13 local banks and other international lenders who have since taken over the equity position of Etisalat UAE, the company’s former shareholder with 40% stake.

An analyst who spoke under anonymity to PageOne.ng said Boye’s pitch might be understating the obvious. There are indications that about 60% stake in 9Mobile must have been acquired by Dangote Industries. A conglomerate owned by Aliko Dangote, Nigeria and Africa’s richest man.

Earlier this month, close sources to Etisalat Nigeria told PageOne.ng that the remaining equity position might be taken over by French and one of the major mobile carriers in Africa, Orange Telecom as well as Vodafone are in high-level discussions to take up the remaining 40% stake in Etisalat Nigeria.

One source with good knowledge of the matter said Boye Olusanya’s pitch statement is a mere official ‘window dressing’ to digress attention from a transaction that has already been finalised. The announcement of Dangote as a majority shareholder will come in later when the dust over its debt burden has settled.

Etisalat Nigeria, now 9Mobile did not refute nor comment on the authenticity of the information. However, for a shareholder to come with over 10% stake, the Nigerian Communications Commission (NCC) has to approve the share transfer which further buttressed the perspective of sources that 9Mobile cannot go public with the announcement of Dangote Industries’ position without proper regulatory approval. Since the company is a private concern, it is not under any obligation to discuss such information.

Should 9Mobile be willing to sell out more equity position in the company, analysts suggest the company would not get a good deal going by its current indebtedness and operational challenges. Other sources said the company will get a good deal going by its nearly 20 million subscribers.

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