" />
Published On: Mon, Jul 17th, 2017

Etisalat: 9Mobile’s tough call

AYOOLA OLAOLUWA |

The new management of ailing mobile telecommunications giant, 9Mobile (formerly Etisalat Nigeria), has devised strategies aimed at turning the company around amid continuing financial and ownership crisis.
Last week, the management of the firm decided to adopt 9Mobile as its new brand name after a meeting in Lagos. According to a source privy to discussions at the meeting, board members voted for the adoption of 0809 number plan, which the network had debuted with in 2008.
He said, “As you know, the network started operations in 2008 with the 090naija4life slogan. This informed the use of the figure 9 in rebranding the network.
“It was also resolved that 9Mobile should drop the domain name, www. etisalat. com.ng after it was unable to reach an agreement with Etisalat International of the United Arab Emirates and its Nigerian partner, Emerging Markets Telecommunications Services Ltd, in the wake of a crisis over a $1.2 billion loan package, which defied solutions”.
BusinessHallmark reliably gathered that all efforts to get the approval of Etisalat International for the continued use of its Etisalat franchise and provision of technical support failed, leaving the new management of the network giant with no other choice than to severe all links and partnership.
It would be recalled that the CEO of Etisalat International, Hatem Dowidar, had recently said that “All UAE shareholders of Etisalat Nigeria, including United Arab Emirates-owned investment fund, Mubadala, have exited the company and have left the board and management. I don’t think we want to come back to Nigeria or have any dealing with the firm as it is. The train has left the station on that one”.
Findings revealed that the 13 consortium banks, namely Guaranty Trust Bank, Access Bank, Zenith Bank, UBA, Fidelity Bank and First Bank, among others are now the owners of the network in a new share-restructuring arrangement.
Before the takeover, UAE’s Etisalat Group had 45 percent stake in Etisalat Nigeria, followed by Abu Dhabi’s Mubadala, with 40 percent stake and the Hakeem Bello-Osagie-led Emerging Markets Telecommunications Services (EMTS) with 15 percent stake. All their shares (100 percent) have been ceded to the banks, it was learnt.
Efforts by our correspondent to know the plans of the network’s management failed as calls to its Vice President, Regulatory and Corporate Affairs, Ibrahim Dikko, were not picked while a text message to his mobile number failed to elicit any response.
However, a telecoms expert, Dr. Olawale Durotimi, who bared his mind on what the network should do to revamp its fortune, said some of the options available for 9Mobile are consolidation, merger or finding new investors.
“Since the banks can’t run the network, I think they will try to stabilise it first and then sell it to prospective buyers. The banks have the option of restructuring the debt after transferring it to its new owners. Another option is to merge with the existing three networks, namely MTN, Glo and Aritel,” Durotimi said.
In a move aimed at resolving its debt crisis and attracting new investors, the network recently announced the reconstitution of an interim board and executive management, naming Mr. Boye Olusanya as its new Managing Director/CEO.
Olusanya was the former Deputy Managing Director of Celtel, which now operates as Airtel Nigeria, after its acquisition by India’s Bharti Airtel.
The network also named Dr. Joseph Nnanna, an economist and Deputy Governor of the Central Bank of Nigeria (CBN), as the new chairman of its board.
Other members of the new board include former National Senior Partner, KPMG Professional Services, Mr. Oluseyi Bickersteth; former Managing Partner, PricewaterhouseCoopers (PwC), Mr. Ken Igbokwe; and Mrs. Funke Ighodalo, who has been appointed the new CFO of 9Mobile.
According to insider information, the five-man board was carefully appointed by all parties – CBN, the banks and shareholders – involved in the restructuring of the telco.
On the five-man board, CBN was given the chairmanship slot, the shareholders were given one slot for an NED, while the banks got three slots (CEO, CFO and an additional NED).
Meanwhile, the Asset Management Corporation of Nigeria (AMCON) has said that it is not involved in the current effort to save the troubled network giant.
Its Head, Corporate Communications, Mr. Jude Nwauzor, told BH that the network is not in the corporation’s portfolio of manage companies. “We are not currently involved. We are leaving the banks to sort out the problem. It is only when they can’t do that that we can come in to recover the debts. But it hasn’t come to that point. We should just allow the banks to do their job”, he said.
Trouble started for Etisalat Nigeria in 2016, following its failure to meet its obligation in respect of a $1.72 billion (about N541.8 billion) loan facility it obtained from a consortium of banks in 2015.
The loan, which involved a foreign-backed guaranty bond, was for the mobile telephone operator to finance a major network rehabilitation and expansion of its operational base in Nigeria.
Failure to meet the debt servicing obligations agreed to since 2016 result in the consortium of banks, prodded by their foreign partners, issuing a threat to take over the company and its assets across Nigeria.
The intervention of the NCC merely helped in postponing the evil day. The invitation of the CBN to be involved in the negotiations succeeded in persuading the banks to give Etisalat a chance to renegotiate the loan’s repayment schedule.
However, Etisalat Nigeria also faltered on the May 31 repayment deadline it gave the banks, resulting in a final defaulting note and enforcement notice issued on June 9, 2017 empowering the banks to swoop on the company and takeover.
The inability of the management of Etisalat Nigeria to make any meaningful progress in its negotiations angered Mubadala, providing it with the reason to make up its mind to walk away from the business.
Challenges
Experts have expressed fear that the telco company could be facing serious challenges ranging from rebranding, retaining their customers who are unfortunately already migrating to more stable networks among other hiccups that may be telecoms based.
Others commentators have also said that with the economy in a recession, there is discomfort a company in crisis may find it difficult to survive in a weak economy. In fact, the issue of forex volatility is still seriously ravaging companies who have either borrowed money in foreign currency or have other forex related dealings are in bigger trouble than envisaged.

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Most Shared

Recent posts

  • Coronation Merchant Bank CRO emerges RIMAN President

    The Chief Risk Officer of Coronation Merchant Bank; Mr. Magnus Nnoka has been elected as the president of the Risk Management Association of Nigeria (RIMAN). His election  took place  at the 18th Annual International Conference and Annual General meeting of the Association which took place recently at the Eko Hotels and Suites. Now in its […]

  • Wema Bank Introduces Agent Banking in Kano, Targets Retail Sector in North-West

    Wema Bank Plc has introduced agent banking in Kano as it seeks to deepen its retail footprint across informal economic sectors of the North-Western states and to drive financial inclusion within the entire northern region of the country. Agent Bank is a cost-effective medium employed by Banks to provide financial access to unbanked, underbanked, and […]

  • Airtel Restores Hope for Family of Five in 2nd Episode of ATL 4

    The second episode of Airtel Touching Lives (ATL) Season 4, which aired last Sunday, June 17, documented how Airtel literally touched the lives of the Olanrewaju Komolafe family; a family of five, battling with a streak of unending tragedies. The episode, which aired on Africa Magic Family, revealed how Olanrewaju Komolafe, a barber and commercial […]

  • Investors cautious as banking stocks remain weak

    By OKEY ONYENWEAKU As market volatility continues to be more pronounced, investors have become increasingly torn between putting their hard earned money in the money market, capital market and other sectors which might offer superior returns. Market analysts become jittery over the slow paced growth of the economy (1.95 percent), high non-performing bank loans (average […]

  • Renaissance Capital initiates coverage on top Nigerian staple food producers

    Renaissance Capital, a leading emerging and frontier markets investment bank, initiated coverage on the shares of Nigeria’s staple food producers: Flour Mills of Nigeria, Dangote Sugar Refinery, Dangote Flour Mills and NASCON Allied Industries. This coverage aims to provide investors with the in-depth analysis necessary to make informed investment decisions. The initiation report states that […]

  • Anxiety mounts over U.S. interest rate hike

    …expect capital flight, experts warn FELIX OLOYEDE There is growing concern over the effects of U.S. Federal Reserve’s decision to raise its benchmark interest rate, would have on the Nigerian economy as experts expect investors to take a flight. Investors are usually looking out for areas of higher returns and greater political stability. The Federal […]

  • Democracy Day controversy:  How Orji Uzor Kalu masterminded my humiliation

    By Sir Don Ubani The World over, governments, especially democratic governments, place maximum emphasis on protocol. The observance and application of protocol in the affairs of a government determines, to a very reasonable extent, the definition of civility and, of course, respectability it attracts to itself. According to an Elizabethan playwright and dramatist; Jane Smith, […]

  • 2019: Ambode’s re-election bid in jeopardy

    By OBINNA EZUGWU The political future of Lagos State governor, Mr. Akinwumi Ambode is said to hang in the balance as his political godfather, Ashiwaju Bola Ahmed Tinubu is allegedly plotting his replacement in 2019 over certain unresolved issues. Business Hallmark learnt from sources that Tinubu is under increasing pressure from people around him, notably […]

  • Fidelity Bank aims for the top

    .           Okonkwo’s relentless drive yields dividends Barely 30 years after it was licensed by the Central Bank of Nigeria (CBN) to operate as a commercial bank, Fidelity Bank has successfully risen to the leadership position amongst tier-2 banks in Nigeria. The bank’s 2017 financial year performance is a testament to the significantly improved optimisation of […]

  • Fuel subsidy Impasse: Dangote Refinery to the Rescue

    By AYOOLA OLAOLUWA Barely eight months to the February 16, 2019 election President Muhammadu Buhari and leaders of the All Progressives Congress (APC) are facing a big dilemma. The administration, it was learnt, is torn between increasing the fuel price and subsidising it to maintain the N145 per litre price, despite the current crude oil […]

  • 2019: Abia APC boss vows to make votes count

    …the era of writing results outside polling booths is gone – Nwankpa  PETER OKORE, Umuahia The Abia state chapter chairman of the All Progressives Congress, APC, Chief Donatus Nwankpa,  has vowed that Nigerians will resist any results of the 2019 general elections  written in a private residence and  brought to the premises of the Independent […]

  • Editorial: June 12: Beyond the honours

    President Muhammadu Buhari pleasantly shocked most Nigerians on June 1, when out of the blues, he announced the change in Democracy Day from May 29 to June 12, and awarded Chief M.K.O. Abiola, the acclaimed winner of the June 12, 1993 election, the highest national honour of Grand Commander of the Federal Republic, GCFR. His […]

  • Experts fault AMCON’s ‘name and shame’ strategy

    FELIX OLOYEDE Asset Management Company of Nigeria’s (AMCON) plan to name and shame Politically Exposed Persons (PEPs) is predicted to come to naught as financial analysts contend that that similar actions embarked upon by the Central Bank of Nigeria (CBN) and deposit money banks (DMB’s)in 2015 did not yield the expected results. AMCON earlier in […]

  • Atiku urges APC to concede defeat like Jonathan if it loses

    Former Vice President Atiku Abubakar has called on the All Progressives Congress (APC) in Ekiti State to accept defeat in good faith if it loses the July 14 governorship election. Atiku, who visited Gov. Ayo Fayose in Ado Ekiti on Monday said losing an election to a rival party should be seen in the light of the […]

  • Nigeria to shut borders over rice smuggling

    The Nigerian Government says it will shut the land border between it and a neigbouring country in a few days time to avoid smuggling of foreign rice into the country. Chief Audu Ogbeh, the Minister of Agriculture and Rural Development, made the disclosure in Abuja on Monday while speaking with youths in a leadership clinic […]

  • N500m for lawyers over MTN’s fine

    The Federal Executive Council (FEC) on Wednesday approved the payment of N500 million legal fees to lawyers for the recovery of N330 billion fine from the Mobile Telecommunications Network (MTN). MTN was fined by the Nigerian Communications Commission (NCC) in 2017 for breaching directives on SIM registration. The Minister of Justice and Attorney-General of the […]