Smile Telecoms Wants Barclays Africa to Review Bid for the Sale of 9Mobile
It appears the controversy that has trailed the sale process of 9Mobile is yet to settle. A reserve bidder, Smile Telecoms Holdings is calling for a review of the sale process. This news is coming on the heels of the recently announced sale of 9Mobile to Teleology Holdings.
Smile’s vexation is contained in a two-page letter to Barclays Africa, dated 21 February, 2018. In the letter, Smile decried that due process was not followed in the emergence of Teleology Holdings as the preferred bidder.
In particular, Smile questioned why a preferred bidder was announced even before the process had been completed. This brings to fore the belief that Teleology had always been favoured to emerge victorious. In the letter, Smile requested for proof from Barclays Africa that Teleology had indeed met all conditions that should allow it emerge as preferred bidder.
Responding on February 26, Barclays Africa thanked Smile for its interest so far, and promised to share appropriate updates on the sale process. Interestingly too, Barclays pointed out that its client can “pursue an alternative path” to complete the sale at “their sole discretion”.
However, like Smile, industry watchers see that response as a dribble away from the mark. Sources close to Smile disclose that Barclays’ response evaded the main issues–financial strength, technical capabilities and following due process are key issues they point out as unaddressed.
9Mobile Preferred Bidder’s Requirement is the Next Test
On its part though, the Nigerian Communications Commission (NCC) has always emphasized the importance of bidders having both the financial and technical capabilities to win a sale. It reaffirmed this once again in a statement by its director of Public Affairs, Mr Tony Ojobo. The commission promised that “all statutory and regulatory processes” will be observed in the 9Mobile sale.
As a first test, the preferred bidder, Teleology, is expected to make a non-refundable payment of $50 million (out of $500 million) within 21 days of being announced as preferred bidder. Since Teleology was announced as preferred bidder on February 21, it has until March 13 to pay. The company is also expected to pay the full balance of $450 million this month.
Failure to make these payments would bring more questions about the 9Mobile sale process. The process has already been criticised as not transparent by major telecom companies like Airtel and Globacom, both of whom were initially bidders.
The sale needs to be completed soon, else it casts more problems for the already vulnerable telecom company.
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