Business

9mobile sale: Barclays Africa admits error

Published

8 years ago

March 21, 2018

Barclays Africa, the financial adviser handling the sale of 9mobile has admitted due process was not followed in the bidding process of the embattled telecommunication firm.

The confirmation that due process was not followed in the sale of 9mobile to Teleology Holdings Limited 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).

The letter, dated 28 February 2018, copied to the board of 9Mobile was signed by one Hasnen Varawalla as Managing Director/Co-Head, Africa Banking.

Barclays in its response to an earlier letter from the board of 9mobile noted that the instructions in the letter by the board are not in line with the process letter dated 26 January 2018, as approved by the Board and issued to each bidder.

Barclays Africa further lamented that its advisories were largely ignored by the board of 9mobile so as to achieve a predetermined end.

“We further note that on Tuesday, 20th February 2018, and based on an updated proposal from Smile Telecoms Holdings Limited, we updated our analysis of the comparison of the two offers received from the bidders (Teleology and Smile) and forwarded the updated comparison to the board via email.”

Barclays is also not happy that contrary to the rules guiding the transaction, the Sales Purchase Agreement (SPA) has not been signed.

Another issue at stake is the simple matter of when the 21-day timeline for the preferred bidder to pay a non-refundable cash deposit of $50 million.

Many are of the view that counting from February 22, the 21-day window within which Teleology was supposed to pay the $50 million lapsed March 14, but another interpretation insists it is 21 working days, weekends and public holidays excluded since banks don’t work on those days. That gives Teleology, the preferred bidder till March 22 to pay up.

There are reports that the second preferred bidder Smile Telecoms is gearing up should the preferred bidder Teleology Holdings default in the payment.

The Central Bank has also promised to carry out a financial check on the winner of the sale while the Nigerian Communications Commission will focus on the buyer’s technical competence and quality service to its subscribers.

Etisalat Nigeria, now 9mobile plunged into crisis last year after a consortium of banks seized control of a 45 percent stake from Abu Dhabi’s Emirates Telecommunications Corporation after it defaulted on a $1.2bn loan.