Barclays Africa has pulled out as financial adviser over the sale of 9mobile for the consortium of the 13 lender banks after the Central Bank of Nigeria (CBN) questioned the bank’s transparency in the bidding process of the telco, BusinessDay gathered.
Informed sources tell BusinessDay that the CBN is particularly concerned about how Barclays chose the final round of bidders, as more qualified, interested bidders were not shortlisted to run in the financial bid stage.
Umar Danbatta, the Executive Vice Chairman of Nigerian Communications Commission (NCC) confirmed in a text to BusinessDay that the commission wrote a joint letter with the Central Bank of Nigeria (CBN) through Godwin Emefiele, CBN governor, to GTBank, which is the facility agent for the 9mobile syndicated loan. In the letter, the two regulators expressed displeasure with the “unwillingness of Barclays Africa” to follow due process in the bid.
This came after the CBN and NCC received reports and petitions from bidders and stakeholder questioning the transparency of Barclays bank.
CBN and NCC stated in the letter dated November 4, 2017, that they had made it clear from the beginning that the bidding process for 9mobile must be “transparent and fair, with the financial and technical capabilities of the final bidders without question.” The regulators therefore have reason to question the criteria for selection if companies with strong financial standing and advanced technical capabilities were dropped from the final bidding process.
They said they now have “serious concerns” since the appointment of Barclays Africa as financial advisers.
“They have repeatedly exhibited signs of opacity in the sale process for 9mobile. Given the overriding public interest in the company and the need for transparency, we advised that Barclays advertise the call for ‘expression of interest’. Barclays declined, insisting instead that the company being a private one, should not be taken through a public sale,” the letter read.
“This lack of a transparent process has proven to be selective and arbitrary, leading to allegations that the process is being teleguided to a rigged and predetermined outcome. The CBN and the NCC will not fold their arms and allow this to materialise.”
The regulators then directed that all steps and decisions taken by the financial advisers as well as other advisers from the end of “expression of interest” must be communicated to CBN and NCC, who will have to approve in writing.
They also directed that the final bid process must be “open and transparent” in line with international best practices.
Danbatta and Emefiele said the December 31, 2017 deadline for the handover of 9mobile to the preferred bidders “remains sacrosanct”.
A source at CBN told BusinessDay that they were not satisfied with the process leading to the selection of bidders but Barclays bank has been unwilling to listen to their concerns and instead seems determined to reach a predetermined conclusion.
The source explained that that Barclays could not explain how they accessed the ‘technical capacity’ of the shortlisted bidders and they also declined to allow the NCC be part of the process of determining the technical capacity of the bidders. The source say they could not understand why a global player like Vodacom was disqualified while less qualified local players with no track record in the telecom sector were short listed.
Also the CBN source questioned how Barclays determined the financial capacity of bidders noting that one of the disqualified bidders had secured a letter of guarantee from Swtizerland based UBS attesting to its financial capacity but was still disqualified whereas some of the qualified bidders have clearly indicated that they will not pay cash for the 9mobile but would be proposing a merger.
Calls put through to Barclays bank in Nigeria to react to the allegations did go through.
But Olusola Teniola, President, Association of Telecommunications Companies of Nigeria (ATCON) have told BusinessDay cautioned the NCC against interfering in the bidding process for the sale of 9mobile.

This he says is because, “Barclays Africa was chosen as the financial adviser for the banks by the banks themselves. The process has already begun and second round bidders have already been selected so there is no way that NCC can halt this process. It does not become their business until the bid has been won and the license needs to be signed off by the regulator.”
On CBN querying the fairness and transparency of the process, Teniola says; “well the CBN might have their reasons but that means that they are questioning the process of mergers and acquisition in Nigeria and they need to be careful, otherwise people will think there is an ulterior motive.”
According to news reports, 10 out of the 16 interested bidders have been shortlisted into the final stage by Barclays. The companies are Globacom Nigeria Limited, Bharti Airtel, Alheri Engineering Limited, Smile Telecoms Holdings, Helios Towers, Centricus Capital, Africell, Abraaj Capital, Teleology Holdings Limited, Ericsson, Africa Capital Alliance (ACA) and The Carlyle Group.
Industry watchers have however expressed doubt that any operating telco in Nigeria might win the bid to acquire 9mobile, especially in hard times such as this, when operators are struggling for survival in the midst of clear market dominance in terms of subscriber base, infrastructure ownership and revenue share, in addition to the drastic reduction of average revenue per user (ARPU).
Tony Ojobo, Director, Public Affairs, NCC told BusinessDay a few weeks ago that no telecommunications operator in Nigeria had informed the regulator about intentions to acquire 9mobile.
“NCC is not part of any of such negotiations as it is a private negotiation. It is only when an operator feels cheated or when people have crossed the line that NCC will be involved. For now, we know nothing about it,” Ojobo said.
Recall that BusinessDay had recently reported that 9mobile was gearing towards sealing the deal with investors form the United Kingdom, after BUA Group and Virgin mobile had signified interest.
BusinessDay gathered that Boye Olusanya, Chief Executive Officer, 9mobile recently returned from the United Kingdom where he went to make final agreements with investors.
“The CEO went to the UK to discuss issues with new investors who have shown interest in the newly branded 9mobile. In the next few weeks, I’m sure an announcement would be made about the outcome of the meeting. Apart from that, management and operations have been running smoothly,” sources close to 9mobile revealed.
9mobile which was formerly Etisalat was forced to rebrand after its Abu Dhabi arm pulled out and new board members were appointed to run the affairs the company following failed negotiations with its lenders over a missed payment of the $1.2billion loan taken out from a consortium of 13 Nigerian banks in 2013. The telco is currently facing serious challenges operating in the Nigerian market as it continues to lose subscribers daily. Its subscriber base has dropped significantly from about 21million to 17,203,940 million subscribers on the network according to data on the NCC website.
Jumoke Akiyode- Lawanson
