Teleology Holdings, the new owners of 9mobile, have withdrawn from further participation in the 9mobile takeover. 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.
Teleology Holdings has become increasingly uncomfortable with actions taken outside of the agreed business plan, since the takeover, most important of which is how it has been blocked from concluding a management services contract with the local joint venture, Teleology Nigeria Limited. The management services contract would have enabled Teleology Holdings and its team of experts oversee the implementation of its elaborate business plans including funding proposals — but that so far been impossible.
Wood is understood to have resigned from the boards of Emerging Markets Telecommunication Services (trading as 9mobile) as well as Teleology Nigeria Limited and has already communicated his current disenchantment with the 9Mobile project to his confidants in Teleology.
“Fifteen Teleology experts have worked since June 2017 on detailed 9mobile turnaround planning, development strategies and financial restructuring,” one quoted him as saying on Monday.
“This included lining up more than US$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. We now must stand down from further work on the 9mobile project.”
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.
In a pre-disconnection notice advertised by the Nigerian Communications Commission (NCC)) on December 18, HIS, the infrastructure services provider which hosts a 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. Should this disconnection take place, subscribers on 9mobile’s network would have been effectively shut out completely from the telecommunications network and would be unable to make or receive calls.
9Mobile has been at the receiving end of considerable customer attrition since its financial troubles became public in 2017.
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.
Billionaire, Otedola sells off Forte Oil
Billionaire businessman, Femi Otedola has revealed that he has sold his interests in Forte Oil.
Otedola made the revelation on Wednesday on his verified Instagram handle, adding that he has moved on from being a player in the petroleum industry to focusing on his power generation business.
The businessman, who shared photos of the different brand changes that the oil company had undergone, wrote: “A few years ago, my team and I embarked on an arduous task of transforming a moribund petroleum marketing business, African Petroleum Plc (formerly British Petroleum) into Forte Oil Plc; a leading integrated solutions provider with solid footprints in downstream petroleum marketing, Upstream Services and Power Generation and one in which we built intrinsic value to the benefits of our shareholders.
“In line with my principle of business focus, we have divested from our marketing and upstream businesses and shall from now on focus and consolidate on the gains of our power generation business, Geregu Power Plc.
“We wish our successors the very best and urge them to build on our legacies which have been established since 1964.”
Gencos may get fresh N600bn Palliatives
The Nigerian Bulk Electricity Trading Plc (NBET) has recommended additional N600 billion under the ‘Payment Assurance Guarantee (PAG)’ for the power generation companies (Gencos).
PAG was first set up in 2017 by the NBET to, among other objectives, mitigate the financial constraints of the Gencos, who as a result of the poor remittances from power distribution companies (Discos), do not get enough money for the power they generate. The initial fund worth N701 billion covered the Gencos’ revenue shortfalls between 2017 and end of 2018.
However, reliable sources within the power ministry, NBET, Nigerian Electricity Regulatory Commission (NERC) and industry operators disclosed that a N600 billion extension package may have been worked out and approved by the government, to continue the scheme and keep Gencos and gas suppliers running.
These sources, however, explained the Central Bank of Nigeria (CBN), which provided the first N701 billion package to the NBET on terms that included the bulk trader repaying the loan in 10 years, would also disclose the terms for the new package.
The Association of Power Generating Companies (APGC), said they were yet to be informed of the new funding window. They also noted that such funding would be another palliative to the financially-distressed Nigeria’s power sector.
“As far as we are concerned, it’s a rumour until we receive a formal notification,” said the Executive Secretary of APGC, Dr Joy Ogaji.
Ogaji, further stated: “Relative to how we feel as Gencos, these are palliatives to the symptomatic decadence of the sector. Until the government decides to move from palliatives to cure, we will continue in this unending and incomprehensive dance.”
Meanwhile, Nigeria’s electricity generation capacity has continued to wobble with the average volume of power generated into the grid in seven days – between June 5 and 11, almost at per with the volume that was not generated due to multiple constraints.
Records from the Advisory Power Team in the Office of the Vice President, Prof. Yemi Osinbajo, indicated that between these periods, the country’s average daily power supply was 3,483 megawatts (MW), while constrained volume was 3,031MW, resulting to a financial loss of N10.184 billion.
It explained the highest generation volume for the period was 3778.84MW generated on June 5, while the lowest was 3166.65MW on June 6. Similarly, the country had the highest volume of constrained electricity for this period on June 6 when 4161.7MW could not be generated and the lowest of 2794.5MW unavailable on June 10. Gas supply, water management, transmission and distribution constraints were reportedly responsible for this.
Airtel wants to join MTN at NSE
Airtel Africa Ltd, a subsidiary of Indian telecoms group, Bharti Airtel Ltd, is considering a stock market flotation in London, designed to expand its data and mobile money services across Africa. The telecoms company has also indicated interest to list on the Nigerian Stock Exchange (NSE), which is one of the 14 countries where it currently operates.
When listed on the NSE, Airtel will become the second telecommunication company in Nigeria to be so listed.
Nigeria’s biggest telecommunication by market share, MTN, on May 16, 2019, listed 20.35 billion shares on the Nigerian bourse at N99 per share.
Airtel Africa is aiming to raise about $1 billion in a June equity offering, a source close to the deal said.
Airtel operates in 14 African markets, including the Democratic Republic of the Congo, Kenya, Nigeria, Rwanda, Seychelles, Uganda, and Zambia.
Last year, the telecom operator raised $1.25 billion from six global investors, including SoftBank Group Corp, Warburg Pincus LLC, and Temasek Holdings (Private) Ltd.
A further $200 million was raised in January from the Qatar Investment Authority (QIA), valuing the company just under $5 billion.
A report by Reuters said Airtel Africa is looking to trade on the main market of the London Stock Exchange, using its premium listing segment, which has more stringent rules than the European Union’s minimum requirements and sells 25 percent of new shares to reduce existing debts.
The cash injection from current investors has already helped to reduce Airtel Africa’s net debt to $4 billion in March, compared to $7.7 billion in the previous year.
Its net income reached $83 million in the year to March, compared to a net loss of $49 million a year earlier.
The Chief Executive Officer of Airtel Africa, Raghunath Mandava, in a statement, said: “The 14 countries where we operate offer strong GDP growth potential and have young and fast-growing populations, low customer and data penetration and inadequate banking infrastructure. These fast-growing markets provide us a great opportunity to grow both our telecom and payments businesses.”
Indian owner, Bharti Airtel, last year ditched the Initial Public Offering (IPO) of African mobile phone mast firm Helios Towers, without giving any reason.
A source said at that time the expected IPO price was too low for shareholders who had been valuing the firm at as much as $2.8 billion, according to Reuters.
MTN has paid N275bn SIM infraction fine
The Nigerian Communications (NCC) yesterday disclosed that MTN Nigeria has so far paid N275 billion to the Federal Government as part of the N330 billion imposed on the telco for failing to disconnect unregistered SIMs.
Described as a landmark sanction in the industry, the regulator had initially imposed N1.04 trillion fine on MTN for the infraction. That was, however, reduced to N330 billion after months of negotiations. Part of the fallout of the negotiated terms of payment of the fine was the listing of MTN on the Nigerian Stock Exchange (NSE), and that was done last week.
According to NCC, based on the staggered payment arrangement, MTN now has a deadline of May 31 to pay the sixth and final tranche of the balance of N55 billion.
After six months of negotiation and re-negotiation over the fine which led to the reduction to N330 billion, it was agreed that MTN would pay a balance of N280 billion in six tranches. This was in addition to the “goodwill” payment of N50 billion earlier made by MTN to the government.
Specifically, MTN began the payment structure with the payment of N30 billion into NCC’s Treasury Single Account (TSA) with the Central Bank of Nigeria (CBN) 30 days from the date of the agreement dated June 10, 2016.
Subsequently, MTN paid N30 billion on March 31, 2017; N55 billion on March 31, 2018; N55 billion on December 31, 2018, and on March 31, it paid N55 billion.
It will be recalled that the NCC, on October 20, 2015, imposed a fine of N1.04 trillion on MTN for infraction of the provision of the NCC Telephone Subscribers Registration Regulations 2011; for failure to disconnect 5.2 million improperly-registered Subscriber Identification Modules (SIM) lines within the prescribed deadline, because these lines had economic activities on them without proper registration.