There are fears in the banking sector that the sudden pull-out of Teleology Nigeria Limited Emerging Markets Telecommunication Services (trading as 9mobile) is sending bad signal on the status of the shares of the banks’ creditors shares that are stilling battling to recover their debts.
Worried watchers of the shares of the creditor banks are concerned that their shares may come down crashing in the coming weeks if the telecoms regulator doesn’t rescue the situation.
Teleology acquired 9mobile, known then as Etisalat, in November 2018-about eight months after it made an initial $500million non-refundable deposit to acquire the telco, and a cumulative 10 months after the takeover was billed to have been finalised.
Etisalat, the fourth of Nigeria’s GSM service providers, began trading as ‘9mobile’ following the financial consequences of defaulting in the servicing of a syndicated loan of $1.2billion owed a consortium of 13 Nigerian banks. In the aftermath, its erstwhile technical partners Etisalat exited the business and requested that the use of the ‘Etisalat’ brand name by the company be discontinued forthwith.
Teleology Holdings, a special purpose vehicle comprising telecom industry veterans and led by Adrian Wood, pioneer Chief Executive Officer of MTN Nigeria, eventually won the final bid — ahead of Airtel, Globacom, Smile, Helios. The Australian, credited with building a very good business model, has remained in the Nigerian business environment since leaving MTN in November 2004.
Teleology Holdings’ successful bid for 9mobile was due largely to the quality of its proposed seven-man management team led by Wood, and was approved by the NCC Technical Evaluation Committee, the 13-member bank lending syndicate as well as the acquisition finance provider, Afreximbank.
However, since the takeover it has become frustrating for the new owners of the company to put it on a new path of recovery forcing the the Founder of Teleology Holdings Limited, Mr. Adrian Wood, who is the pioneer CEO of MTN Nigeria, has resigned from the boards of Emerging Markets Telecommunication Services, which is trading as 9mobile, as well as Teleology Nigeria Limited.
Aggrieved Wood in a statement said: “Fifteen Teleology experts have worked since June 2017 on detailed 9mobile turnaround planning, development strategies and financial restructuring. This included lining up more than $500 million fresh direct foreign investment from international institutions.
9mobile is an exciting opportunity to build a revolutionary mobile network that could be the pride of Nigeria, unfortunately it appears that we will not be able to participate,” Wood said.
Wood added that: “We now must stand down from further work on the 9mobile project.”
Further compounding the share crisis for the banks is a pre-disconnection notice advertised by the Nigerian Communications Commission in the media on December 18, IHS, the infrastructure services provider, which hosts majority of 9mobile’s base stations, was granted permission to disconnect 9mobile and other debtor telecom operators within a 10-day ultimatum, ostensibly on account of 9mobile’s indebtedness.
Teleology Holdings Ltd will be seeking to exit its shareholding in the local joint venture Teleology Nigeria Limited, which will be required to change its name. The development may further compound the woes of the struggling 9mobile operation.
From more than 22million customers in its heyday in October 2016, for instance, the network had just a little over 15million active subscribers in November 2018, according to NCC data, and has consistently lost customers with each passing month.