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Tag: 9mobile’s sale

  • Updated: 9mobile:Court nullifies sale of Etisalat

    A Federal High Court in Abuja has set aside the sale of telecommunication firm, Etisalat International Nigeria Limited (9mobile) to Teleology Nigeria Limited.

    Justice Binta Nyako, in a ruling, voided all steps taken in relation to the exchange of ownership of Etisalat despite pending orders for maintenance of status quo, restraining parties to a suit, involving investors and other stakeholders in the company, from destroying the res (subject matter).

    Justice Nyako, who noted that parties were all aware of the existence of the suit, the defendants having been served between April 24 and 27, 2018 with the originating process, faulted the sale, as claimed by the plaintiffs in a motion filed on November 16, 2018

    The judge held: “Any action that has been taken concerning the rest of this litigation from the 25th day of April, which is earlier in time, should revert to the position, as of the res, to its 25th day of April 2018.”

    The ruling, given on April 1, 2019 (a copy of which was sighted on Thursday) was in a suit, marked: FHC/ABJ/CS/288/2018 filed on April 6, 2018 by two major investors in Etisalat, Afdin Ventures Limited and Dirbia Nigeria Limited.

    Afdin and Dirbia, whose investments in Etisalat is estimated at $43,033,950, had sued to retrieve their investments on the grounds that they were aggrieved, having been excluded from the decision making process of the company.

    Defendants in the suit are: Karington Telecommunication Ltd, Premium Telecommunications Holdings NV, First Bank of Nigeria Plc, Central Bank of Nigeria, Etisalat International Nigeria Ltd and Nigeria Communication Commission (NCC).

    The plaintiffs stated, in a supporting affidavit to the motion dated November 16, 2018, that they resorted to praying the court to void the sale of Etisalat, upon learning that the defendants have proceeded to conclude the transfer the company’s ownership despite the restraining orders made earlier by the court.

    Read Also: Court warns CBN, NCC on Etisalat

    They said: “In 2009, the plaintiffs/applicants purchased a total of 4,303,391 class “A” shares from the 1st, 2nd and 5th defendants (Karlingtton, Premium Telecommunication and Etisalat International) at the rate of $43,033,950 only, and were issued with share certificates.

    “In 2010, the defendants rebranded Etisalat Nigeria Limited to 9mobile and entered into negotiations with Smile.com and Glo Network to transfer its licence without recourse to the plaintiffs.

    “When the plaintiffs became aware of the purported transaction, they filed this suit along with two applications namely: motion ex-parte and motion on notice, seeking for an order of injunction to restrain the defendants from going ahead with the transaction.

    “When this suit came up for hearing on the 17th of April, 2018, this honourable court ordered parties to maintain status quo-pending the determination of the motion on notice.

    “Notwithstanding the aforementioned order, the defendants continued negotiations with

  • NCC intervenes in 9mobile’s sale

    Telecoms industry regulator, Nigerian Communications Commission (NCC) has laid down rules of engagement that will ensure  the transparent sale of 9mobile and the sustenance of its business after sale.

    The regulator’s rules of engagement are contained in a letter addressed to the Governor of Central Bank of Nigeria (CBN) Mr. Godwin Emefiele.  The NCC letter, according to Smile Communication,  was endorsed by NCC board Chairman, Senator Olabiyi Durojaiye. It is in recognition of the fact that 9mobile is indebted to a consortium of banks that are regulated by the CBN.  Both NCC and CBN have been collaborating to ensure the successful sale of 9mobile.

    The letter identified three criteria that will guide the emergence of a preferred bidder for 9mobile.

    The first is “that whichever company would quality as successful bidder to take over 9mobile has (must have) the technical competence apart from financial capability to turn round 9mobile and not further compound its problems”.

    The second is “that the successful bidder should come in with substantial funds (foreign exchange) to sustain the industry not just recycling funds facilities already within the economy”.

    The third insists “that the company that will take over should have adequate technical infrastructure on ground”.

    have adequate technical infrastructure on ground” puts a question mark to the touted emergence of Teleology Holdings as the preferred bidder.

    Teleology Holdings, as a special purpose vehicle for the acquisition of 9mobile, has no apparent infrastructure on ground.  Unlike its rival Smile Telecoms Holdings, which operates in key Nigerian cities and was announced as the reserved bidder, Teleology Holdings is neither operational nor has experience, as a firm, in Nigeria.

  • ‘Due process ignored in 9mobile’s sale’

    tHE transaction advisor handling 9mobile’s sale process, Barclays Africa, has admitted ignoring due process in the process that threw up Teleology Holdings Limited and Smile Communication as preffered and reserved bidders respectively.

    According to Smile Communications statement, the confirmation is contained in a letter written by Barclays Africa to Guaranty Trust Bank (in its capacity as Facility Agent, acting for and on behalf of the syndicate lenders).

    In the letter  directed to the interim Board of 9mobile, Barclays Africa admitted that its letter to the Board dated  February 19, 2018 in which it responded to the  February 18 letter from the board amongst others advised the Board against changing the rules  mid-way into the process.  “The instructions in the letter are not in line with the process letter dated 26th January 2018, as approved by the Board and issued to each bidder and will effectively amend the same,” Barclays was quoted to have said in the statement.

    Barclays Africa further lamented that its advisories were largely ignored by the board so as to achieve a predetermined end.

  • Smile seeks process review of 9mobile’s sale

    Reserve bidder for the acquisition of 9mobile, Smile Telecoms Holdings Limited, has described as tardy, the manner in which Barclays Africa, the financial advisor handling the sale of the telco,  handled the transaction. It called for the review of the process to uphold transparency.

    Smile’s angst was contained in a letter addressed to Barclays Africa dated February 21, 2018 and signed by Templars, its solicitors.

    In the two-page letter, Smile expressed surprise and disappointment at the manner in which the selection process for the preferred bidder and reserve bidder was conducted.  Of particular concern to Smile, is the fact that the selection of the preferred bidder was announced before the stated deadline of February 26, 2018 as set out in the process letter.

    The company therefore requested Barclays, to as a matter of fairness and urgency, provide a practicable with verifiable (and preferably third-party authenticated) proof that the party that has been selected as the preferred bidder has indeed satisfied all the conditions precedent to the selection.

    However, in its reply of February 26, 2018, Barclays Africa promised to “be in touch with Smile to discuss any updates on the transaction, to the extent considered necessary”.  It expressed gratitude in Smile’s continued interest in the transaction but noted that its clients exercised their rights at their sole discretion to pursue an alternative path to completion of the transaction. Barclays restated its willingness to explore transaction completion with Smile should the pending process not reach a satisfactory conclusion.

    It was gathered from a reliable source close to Smile that Barclays Africa’s letter evaded the critical issues of due process and eligibility of the announced preferred bidder.  The source wondered if the preferred bidder was able to meet the laid down requirements for the transactions that required it to reach agreement on any required financial accommodations with the Syndicate Lenders and the Trade Creditors.

    The requirement also entails the preferred bidder to have firm, unconditional and committed funding for any cash payments and to provide a binding offer that is unconditional, excluding the Formal Licence Approvals.

     

    The Nigerian Communications Commission (NCC) had reassured that only investors with the required technical expertise and financial muscle will buy 9mobile.  A statement signed by its Director, Public Affairs, Mr. Tony Ojobo, stated that the Commission will ensure that all relevant statutory and regulatory processes were duly complied with in the process leading up to the emergence of new owners for the company.

    NCC’s intervention came on the heels of news that Teleology Holding has emerged the preferred bidder for 9mobile.  The announcement was greeted with protests in some quarters. A non-governmental organisation, Business Renaissance Group (BRG), protested against the process, accusing Barclays Africa of sending the letter Teleology in a hasty and preemptive manner. The group stated that Barclays Africa jumped the gun in announcing a preferred bidder.  It noted that in a meeting held with the interested bidders on the 26th of January 2018, Barclays gave the two finalists in the bid process: Teleology Holdings and Smile Telecoms Holdings the opportunity to increase their bid for 9Mobile within 30 days which brought the deadline date to Monday February 26, 2018.

    The group wondered why Barclays could not wait till the February 26, 2018 before its preemptive announcement of a preferred winner.  Further alleging bias against Barclays in the handling of the sale of 9mobile, BRG recalled that Barclays had earlier affirmed that any preferred bidder on selection will need to sign a Sales Purchase Agreement immediately and will have to instantly pay a non-refundable deposit of $50 million.

    It decried a situation where Barclays has now given its announced preferred bidder 21 working days to pay the non-refundable fee of $50 million.  The group further underscored its allegation of a less than transparent handling of the entire bid process by Barclays Africa by recalling that some of the earlier entrants, among them two major GSM network operators, had opted out of the process alluding to lack of transparency.

    It also claimed that at least two major vendors of 9mobile rejected the financial offers of the preferred bidder and had no confidence in weak and unrealistic business plan presented.  And wondered how such a bidder with questionable business plan would be able to sustain and improve the operations of 9mobile.  BRG contended that the precipitated announcement by Barclays is indicative that the preferred bidder did not satisfy any of the precedent conditions.