9mobile not out of the woods yet, as new mgt grapples with pending debt obligations

Without fresh investments, the newly rebranded teleco, 9mobile, would not be out of the woods in the nearest future. This is based on the pressure the consortium of creditor-banks is mounting on the new management to prove its debt-servicing capacity within a short period.

This was indirectly confirmed by 9mobile’s CEO, Mr Boye Olusanya, on Wednesday during the unveiling of the new brand in Lagos.

Olusanya, who expressed optimism on the capacity of the management team to pilot the affairs of the debt-ridden company, however refused to disclose the strategy being put in place to meet the debt settlement terms of the banks.
But a competent source within the 13-bank consortium which facilitated the $1.2 billion loan to former Etisalat Nigeria, said the unexpected pulling out of the UAE-based Etisalat International had left 9mobile with some unsettled commitments, including an outstanding $750 million loan being restructured with the intervention of the regulators.

Additionally, there is a network expansion project estimated to cost $200 million which the former Etisalat Nigeria had started at various parts of its base stations in Nigeria, the source noted.

“But the saving grace is that the regulator (NCC) is not charging the new investors for operational renewal licence fee which would have gulped about $100 million.

“There is the question of staff emoluments which have been on arrears even before the lender banks took up the former Etisalat management,” concluded the insider source.

Read also: Etisalat officially becomes 9mobile, as name change announced

Upon termination of its management agreement with its Nigerian business in June 2017, the UAE’s holding company surrendered its 45 per cent stake to a trustee after series of meetings supervised by the CBN in collaboration with NCC, to save the local company from collapse due to the debt.

But the CEO allayed the fears of the company’s staff who had been on edge over their fate since the debt crisis became public.

“We are inheriting the workforce of Etisalat, but may carry out necessary restructuring where necessary.

“Like any business we are always available for someone with a good offer. But we are prepared to manage this business for the long haul”, Olusanya stated.

He however declined to confirm the actual extent and cost of the rebranding programme, noting that, “If at any point in time someone does come in with an offer that is attractive, then that person will have the right to do whatever they want to do with the brand”, he said.

On his part, the NCC spokesman, Tony Ojobo, said, “To us as the regulators, we regard the name change as a mere change to the company’s trading name.

“The brand name change did not affect the terms of the license which was granted to a Nigerian entity known as Emerging Markets Telecommunication Services (EMTS).”

It is not all gloom for 9mobile as the company’s already well-established roots in the Nigerian market is something it can leverage on.

Based on current consumer data, 9mobile has about 20 million subscribers, making it Nigeria’s number four mobile operator with a 14 per cent market share. South Africa’s MTN maintains the lead with 47 per cent, while Globacom with a 20 per cent share, occupies second place. Airtel, a subsidiary of India’s Bharti Airtel, with 19 per cent of the market, is placed third.

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