The new owners of nIgeria’s fourth largest network 9mobile set to stablizie the telecom ahead of sale
The 9mobile creditor banks are said to be trying to stabilise the business of the troubled country’s fourth largest telecoms group, until they can find new investors, First Bank said, adding that it saw no need to impair loans made to the company, because of its cash flows.
“On the part of lenders, we are trying to reposition the company till we find new investors. With the level of cash flow we believe there will be no need for impairment,” the bank’s chief executive Adesola Adeduntan said on an analysts’ call.
Another lender, FCMB, said on Tuesday banks had agreed to extend a $1.2 billion loan which the mobile operator, formerly known as Etisalat Nigeria, took out four years ago but struggled to repay due to a currency crisis and a recession in Nigeria.
Nigerian regulators stepped in last month to save Etisalat Nigeria from collapse and prevent lenders placing the country’s fourth biggest telecoms group into receivership, prompting a board, management and name change.
The local banks which participated in the loan, many of which are reporting first-half results, have been trying to work out the value of 9mobile before deciding whether to impair the loan or wait until the company finds new investors.
Banks involved in the loan deal include: Zenith Bank, GT Bank, First Bank, UBA, Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank.
GT Bank with $138 million in outstanding loans to 9mobile and Access Bank with $131 million are among the most exposed.
The telecoms group has asked Citigroup and Standard Bank to find an investor to buy into the firm and three companies have shown interest, a banking source close to the deal said.