Nigerian banks to stay put till 9mobile gets an investor(s)

9mobile

Nigerian banks who are heavily-owed by 9mobile, former Etisalat said they are ready to stay put pending the time when the mobile carrier will investors who will bring in funds.

Adesola Adeduntan, chief executive of FBN Holdings, Nigeria’s largest financial services group said banks involved in the deal are confident in the new management running the mobile carrier.

In an analyst conference call monitored by Thomson Reuters, Adesola Adeduntan said:

“On the part of lenders, we are trying to reposition the company till we find new investors. With the level of cash flow we believe there will be no need for impairment.”

9Mobile’s former company, Etisalat Nigeria was owing USD1.2 billion loan to a consortium of 13 local lenders and international banks who had threatened to take over the company’s affairs after negotiations collapsed. With a new management in place, 9mobile has started hunting for new investors to raise funds in order to defray its debt pile.

According to disclosure by some of the lenders, GTBank with USD138 million and Access Bank with USD31 million are the most exposed to the company’s loan portfolio that has disrupted its ownership structure.

Other lenders who are owned in the debt arrangement are Zenith Bank, First Bank, UBA, Fidelity Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank. There were concerns as to whether affected lenders will make provisions for impairments in their books as a result of the non-performing loan. This was said to be the main reason, the Central Bank of Nigeria got involved in the matter to ensure 9mobile’s default does not end to be a systemic risk to the financial markets.

While 9mobile said it has appointed Citi and Standard Bank to help find new investors, there are speculations that 9mobile already has undisclosed investors who are looking at finalising discussions and perhaps get regulatory requirements to pull through an agreement.

As earlier reported by PageOne.ng, Dangote Industries is said to have acquired 60% stake in Etisalat Nigeria. This is based on unconfirmed but reliable sources in Nigeria’s financial services sector.

Dangote Industries is owned by Africa’s richest man, Aliko Dangote with investment across various sectors of Nigeria and Africa’s economy.

According to the sources who pleaded not to be named, 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.

Neither Orange nor Vodafone have commented on the matter. In the latest update, Nigeria’s Central Bank said many investors have shown interest in buying an equity stake in 9mobile, the apex bank has not disclosed the identity of intending investors.

The company has neither commented nor deny the speculation. However, there are signs that a deal will soon be announced given the speed at which the new management was put in place. The company has also, gone ahead to implement its change of brand name across its sales force and service points.

It would be recalled that Etisalat Nigeria entered troubled waters after it was unable to meet up with the repayment of its USD1.2 billion debt it owed a consortium of 13 local banks and other international lenders. Mubadala Development Company PSJC, a 45% shareholder and Etisalat Group of UAE with 40% stake in the company have since exited their stake after debt negotiation broke down.

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