Nigeria’s fourth-biggest wireless carrier, 9mobile, formerly known as Etisalat Nigeria, has commenced the repayment of a loan obtained from a consortium of banks following its acquisition by Teleology Holdings Limited.
“The money has been distributed to the banks,” head of investor relations at Lagos-based United Bank for Africa Plc, Abiola Rasaq, told Bloomberg on the phone.
According to him, the reimbursement is expected to improve the asset quality of the creditor banks that had classified the loan as non-performing.
9mobile repaid $251m last week from the proceeds of the fund Teleology paid for the acquisition, according to two persons familiar with the matter who asked not to be named because they were not permitted to speak publicly on the issue.
A spokeswoman for 9mobile didn’t respond to phone calls and email messages seeking comments. Spokespersons from six of the creditor banks reached by Bloomberg declined to comment.
More than 10 Nigerian banks syndicated the loan to Etisalat Nigeria, including Guaranty Trust Bank Plc, Access Bank Plc and Zenith Bank Plc.
Some of the lenders made provisions on the loans or classified them as non-performing in 2017 and this year.
Each creditor bank was repaid a proportion of the outstanding debt, according to the sources.
The former Etisalat fell into crisis when it defaulted on a loan repayment scheme to the tune of $1.2bn due to a consortium of 13 local banks, citing economic downturn and currency devaluation.
This led to the exit of the Etisalat Group of the United Arab Emirates from the company, which handed over its 45 per cent stake, terminated its existing management and technical support agreements with the telecom company.
The Central Bank of Nigeria in collaboration with the Nigerian Communications Commission, had in July 2017, intervened to save the company from collapse and appointed a Board of Directors chaired by Dr. Joseph Nnanna, the Deputy Governor of the Central Bank of Nigeria.
They were asked to oversee the affairs of the company pending the completion of regulatory due diligence of the bid documents submitted by Teleology and sixteen others for its acquisition.
The consortium of lenders picked Barclays Africa to supervise the sale of 9mobile.
In February this year, Teleology beat 16 other firms that submitted Expression of Interest to Barclays Africa, emerging as the preferred bidder for the embattled telecom company.
Teleology announced its ownership of 9mobile after confirming the receipt of the final approval of no objection by the board of the NCC.