Telecommunication company, 9mobile, has secured a $230million loan facility from the Africa Finance Corporation (AFC) to help reposition and attain its long term goals, Reuters is reporting.
The development was disclosed in a statement signed by Abdulrahman Ado, Executive Director, Regulatory and Corporate Affairs, 9mobile.
The AFC in a letter addressed to the Chairman of the Board of Directors 9mobile, Alhaji Nasiru Bayero, expressed pleasure and support to the turnaround strategy of Emerging Market Telecommunications Services Ltd (EMTS), operators of 9mobile services.
Africa Finance Corporation is pleased to inform Emerging Markets Telecommunication Services that it has received full board approval to support the turnaround strategy of EMTS through a $230m super-senior debt investment.extract from AFC letter to Alhaji Nasiru Bayero, Chairman of the Board of Directors 9mobile
The $230m 9mobile loan by Africa Finance Corporation is part of the financial institutions plan to help bridge Africa’s infrastructure investment gap through the provision of project development, technical and financial advisory services, debt and equity finance.
Some of AFC investments across Africa include Cameroon’s Landmark 420mw Hydro-Electric Power Station, $100 million to Aker energy’s deepwater offshore oil project in Ghana and €174 million in the 44-MW Singrobo-Ahouaty hydroelectric power and transmission project in Côte d’Ivoire.
9mobile’s past struggles
In 2016, 9mobile (formerly Etisalat Nigeria) started defaulting on its $1.3 billion loan obligations to a consortium of about 13 Nigerian banks led by Access Bank, GTB and Zenith Bank.
Etisalat UAE, its parent company, led a few bailouts but these weren’t enough. In early 2017, the consortium threatened to take over the telecom company to recover their money.
After several unmet deadlines, on June 20, 2017, Etisalat Abu Dhabi announced that it had transferred 70% of its holding in Emerging Market Telecommunications Services Ltd (EMTS).
After the exit of the parent company, a new board was established to run the operations pending when a buyer would be found. The name of the company was then changed from Etisalat Nigeria to 9mobile.
Teleology Holding, on 22 February 2018, won the bid for the acquisition of 9mobile, paying a $50 million non-refundable deposit of the $500 million 9mobile bid.
However, more problems arose with shareholders taking 9mobile to court to contest the sale of the company. Major shareholders Afdin Ventures US Ltd and Dirbia Nigeria Limited claimed they stood to lose all of their investment estimated at $43m.
The $230million loan, 9mobile new Lifeline
The new loan facility according to 9mobile will be divided into two tranches used to honour existing debts, finance costs, investment in growth and payment towards quick-win capex initiatives.
Chairman of the Board of Directors, Alhaji Nasiru Bayero, appraised that the loan facility will help strengthen their business sustainability.
We can only express gratitude to the AFC for approving this loan facility that would not only help our business sustainability but also grow it to serve our teeming and loyal customers in Nigeria better. We have completely reviewed our operational, regulatory, financial and technical architecture to ensure we deliver quality services and this facility would go a long way in giving best-in-class services to Nigerians.Alhaji Nasiru Bayero, Chairman of the Board of Directors
9mobile have been struggling in the very competitive Nigerian telecommunication space with rivals MTN and Glo enjoying better patronage and funding.
However, the recent influx of funds through the loan could be the new lease of life 9mobile needs. This loan could help the telco enhance network capacity and innovate to guarantee optimum value to customers.
9mobile’s troubled times affected their customer base, losing subscribers to major competitors. With the new management, board and influx of fund, the company appears set to overcome its troubles and focus on growing the company.
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