As Teleology Holdings Limited begins the exit of its shareholding in the local joint venture due to dissatisfaction over the business relationship with its local partner, 9mobile Nigeria, some banks which offered credit facility to the telecoms company are already unsettled by the development.

The fear of the banks is not unconnected with the status of the amount which is yet to be repaid from the loan they lent the telecoms operator.

Already, some banks in Nigeria exposed to the $1.2 billion loan obtained by 9mobile, formerly Etisalat Nigeria, are beginning to express uneasiness over the reports of Teleology pullout from 9mobile.

Etisalat Nigeria had approached a consortium of Nigerian lenders for a credit facility aimed at expanding its operations in the country. However, when it was unable to service the loan, attempts were made by the lender to take over the company, but the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) prevented this.

Instead, the CBN set up an interim board to run the Etisalat Nigeria, which later changed its name to 9mobile, until a buyer was sourced.

Late last year, Teleology announced a new board for 9mobile, confirming that it was now in charge of the fourth GSM service provider in Nigeria.

More than 10 Nigerian banks syndicated the loan to Etisalat Nigeria, including Guaranty Trust Bank (GTBank) Plc, Access Bank Plc, Zenith Bank Plc and United Bank for Africa (UBA).

Some of the lenders made provisions on the loans or classified them as non-performing in 2017 and 2018.

According to a report last year, the Head of Investor Relations at UBA, Mr. Abiola Rasaq, was quoted as saying that, “The money has been distributed to the banks.”

According to him, the reimbursement is expected to improve the asset quality of the creditor banks that had classified the loan as non-performing. UBA made a N15.2 billion ($41 million) provision on the loan last year.

The report said 9mobile repaid $251 million in November 2018 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.

Each creditor bank was repaid a proportion of the outstanding debt, according to the sources.

Since November 12, 2018, when Teleology Holdings formally took over 9mobile, the company had become increasingly uncomfortable with actions taken outside of the agreed business plan.

According to a source, Teleology Holdings took the risky pullout because it was alleged to be blocked from concluding a management services contract with the local joint venture, Teleology Nigeria Limited and its team of experts restricted from overseeing the implementation of the organisation’s elaborate business plans including funding proposals.

In a related development, Adrian Wood, the brain behind the operation of Teleology has taken from the company. The walk-away of Wood has been attributed to the refusal of Teleology Nigeria Limited to sign a management service contract.

However, some reports suggest that Woods was axed because he had being unable to pay his 13% equity in Teleology Nigeria.

When Daily Independent contacted him for clarification, his phone was switched off, and there was no reply to the text sent to his phone when the paper went to bed.

9mobile’s (then known as Etisalat Nigeria) woes began when it defaulted on a $1.2 billion loan provided by a consortium of Nigerian banks. Parent company Etisalat of the UAE exited the firm, and the banks threatened to take over.

They were however restrained by the Nigerian Communications Commission and the Central Bank of Nigeria (CBN), with the duo constituting an interim board. The NCC, in particular, had to step in, to prevent the banks from going against regulation by attempting to run the firm. Some of the affected banks then made provisions on the loan.

Barclays Africa then midwifed a bidding process for Etisalat of the UAE’s stake. Five firms – Globacom, Smile, Airtel, Helios and Teleology Holdings, made it to the final bidding stage, however, Airtel, allegedly withdrew from the bid process due to what it termed irregularities.

The former Etisalat fell into crisis when it defaulted on a loan repayment scheme to the tune of $1.2 billion 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 percent stake, terminated its existing management and technical support agreements with the telecom company.

Teleology is also in dilemma over the $50 million initial deposit paid for the acquisition of 9mobile which may be non-refundable.

•Sourced from a Independent report

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