Nigerian banks have confirmed that a deal is now in place to allow 9Mobile run smoothly pending an equity injection from new investors. This allows banks to avoid taking a provision on 9Mobile loans, an analysis by Nairametrics explained.
A consortium of Nigerian banks who lent 9Mobile about $1.2 billion in 2013 put pressure on its former owner and technical partner, Etisalat UAE to bail out its Nigerian affiliate after it had defaulted in meeting its repayment obligations.
This led to a series of negotiations that ended in a dead lock and eventually, Etisalat UAE had to pull out, effectively writing off all of its investment in its Nigerian entity and severing all ties including brand usage. Etisalat UAE shares were transferred to a Trustee, management by United Capital Plc.
In an analyst call during the week, the CEO of First Bank, Adesola Adeduntan, explained to investors that 9Mobile’s cash flows were enough to avoid any impairment by the bank. “On the part of lenders, we are trying to re-position the company till we find new investors. With the level of cash flow we believe there will be no need for impairment,” he explained.
A Reuters report also claims FCMB revealed that the banks had agreed to extend the $1.2 billion loan in what looks like a restructuring deal pending when a new investor is secured.