Whether to write down the asset has emerged as a sticking point between the owners, who include Nigerian lenders Access Bank, Guaranty Trust Bank and Zenith Bank, and investments banks including Citigroup and Standard Bank Group that are in talks to lead the sale process, said the people, who asked not to be identified as the negotiations aren’t public. The investment banks want the owners to agree to take a writedown before the sale moves forward, they said.
While such a move would expedite a sale, a writedown could prove costly. The carrier, which has been rebranded 9mobile, owes creditors and suppliers as much as $1.2bn, the people said. That’s more than a price tag of about $700mn that’s based on a ratio of five times earnings before interest, taxes, depreciation and amortization, one of people said.
Oluseyi Osunsedo, a spokeswoman for 9mobile, said by text message she couldn’t comment. The carrier’s chairman, Joseph Nnanna, said this month the board would “ensure that the company remains stable and the banks that lent it money do not suffer loss.”
Oluwatoyin Sanni, head of United Capital Trustees Ltd, which manages the lenders’ shares in 9mobile, didn’t answer calls or a text message.
The new owners seized control of 9mobile last month from Abu Dhabi-based Emirates Telecommunications Corp following the failure of debt-restructuring talks. The consortium is now turning its attention to offloading the company, the smallest of Nigeria’s four mobile-phone operators with 20mn subscribers. Its three larger competitors are Johannesburg-based MTN Group, the market leader with 60mn customers, India’s Bharti Airtel and Lagos-based Globacom.
While Emirates Telecommunications owned 45% of Etisalat Nigeria, Abu Dhabi-based wealth fund Mubadala Investment Co agreed to start handing over its 40% stake.
Nigerian companies have suffered since the 2014 oil-price crash triggered an economic contraction and sent corporate earnings plunging. Rampant inflation reduced consumers’ purchasing power and the central bank’s tightening of capital controls led to a shortage of dollars, which companies need to pay for imported equipment and service foreign-currency loans.
Godwin Emefiele, the governor of the Central Bank of Nigeria, told reporters on Tuesday there was a “surge” of investors interested in 9mobile and a sale may be agreed this year.
