Barclays bank has been entrusted to secure new investors for 9mobile, once recognized as Etisalat Nigeria, according to a report by Reuters. This remarkable development stems from a tumultuous financial crisis that resulted in significant changes in the telecommunication company’s framework, financing, and even its name.
Plagued by an overwhelming financial burden, 9mobile found itself unable to repay a substantial loan acquired from a consortium of banks. This funding was initially intended to propel its operation expansion in Nigeria. A reported $1.2 billion loan from 13 banks proved to be a debilitating strain on the telecoms firm as they grappled with payment difficulties. The instability of the exchange rate at the time further aggravated their financial dilemma.
In the wake of this imminent financial debacle, the Central Bank of Nigeria moved swiftly to stabilize the situation and circumvent total collapse of the company. Steps were taken to replace board members, revamp management and rebrand the company. The new brand, 9mobile, emerged from the ashes of this upheaval. In a significant move, management agreed to relinquish its 45% stake to a trustee, effectively severing its ties with its Nigerian business operations.
Insider sources share that Barclays Bank was bestowed the pivotal task of bringing in new investors, a role previously handled by Citigroup and Standard Bank. These financial institutions decided to step aside due to their prior association with the telecommunications firm. Reports suggest that Barclays has now taken the reins and is presently in the process of compiling a database of potential investors.
Focused on forging ahead, current 9mobile Chief Executive Officer, Boye Olusanya is steering the company towards rebuilding, with increased emphasis on profitability and securing fresh capital. Amidst these transformational changes, loan repayment has been temporarily paused to prevent another potential financial rift until new investors are introduced.
Despite these setbacks, 9mobile holds a staunch 14% (20 million subscribers) of the total mobile phone user population in Nigeria. Though the company continues to grapple with economic challenges, and a still volatile exchange rate, they remain a key player alongside competitors MTN, Airtel, and Globacom. Further reports providing insight into the company’s adaptation and progress are eagerly anticipated in the telecoms sector.