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9mobile Sale Suffers Huge Setback as Court Quashes Process?

By Dipo Olowookere

The plan to sell 9mobile, formerly known as Etisalat Nigeria, may have suffered a huge setback with a latest development last Friday.

Last week, a Federal High Court in Lagos quashed an ex parte order it earlier granted in July 2017, giving the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) the legal backing to set up an interim board to oversee the sale of the country’s fourth largest telecoms firm.

The board was to stay for six month, when the company was expected to have found a new investor, but this was extended because the process could not be concluded as at December 31, 2017, it was meant to end.

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Barclays Africa, which is shopping for a new buyer for 9mobile, has shortlisted five companies from which it is expected to choose winner of the bid.

The five firms are Globacom, Bharti Airtel, Teleology Holdings Limited, Smile Telecoms Holdings and Helios Investment Partners LLP.

But last Friday, the court held that the ex parte order it granted in July last year was a nullity, made without jurisdiction and obtained by misrepresentation of facts and as a result, reversed “all steps taken by it.”

On July 3, 2017, Spectrum Wireless, a shareholder of Emerging Markets Telecommunications Service (EMTS), which owns the 9mobile licence, had lost its bid to stop United Capital Trustees Limited, representatives of the debtors, from taking over the company.

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Spectrum claimed UCTL misrepresented facts that alienated its interests in the company.

But the court has now discharged the order and asked UCTL to reverse all steps taken by it since the order was a nullity.

With this new order, the central bank and the NCC may have to start the process of selling 9mobile all over again.

9mobile, while operating as Etisalat Nigeria, obtained a syndicated loan of $1.2 billion from 13 Nigerian banks, but defaulted in its repayment plans.

This led to the lenders attempting to take over the company so as to recover the bad debt, but this was prevented by the CBN and the NCC.

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Etisalat Group, the major investor in Etisalat Nigeria, during the process, pulled out of the business and asked that the use of its brand name in Nigeria be stopped.

This necessitated the change of name of Etisalat Nigeria to 9mobile by the new management.

With the latest development, it is not certain what next step the CBN, the NCC, and Barclays Africa would take now.

Meanwhile, as at the time of filing this report, Business Post was unable to reach the parties involved in the sale of 9mobile for comments on Friday’s court order.

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Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan.

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