Some 20 million Nigerians who are subscribers of 9mobile (formerly Etisalat) may be cut off in 2022 as a result of the complications arising from the $1.2 billion loan default by the telco to a consortium of banks.

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Also, over 4,000 staff of the company risk being laid off.

Senate investigation said that all these can only be averted if a new buyer emerges, takes over the company and pays off the debt before the 15 years’ operational licence given to the company expires in 2022.

This was revealed on Thursday during the investigative hearing by the Senate Committee on Banking and Other Financial Institutions, which is currently investigating the loan default threatening the existence of the 9mobile.

Speaking during the hearing, the Nigerian Communications Commission (NCC), represented by Yetunde Akinoye, director of Legal Services, said that in 2007 9mobile was given a 15-year licence to operate in Nigeria, which according to her, will expire in 2022.

She said given the financial crisis facing 9mobile, the hope is that a new investor would emerge to take over the company, pay back the consortium of backs the loans which the original owners of the telecom company collected, and also pay for the renewal of the licence to retain the services and subscribers.

She said that if this is not possible, the banks, in alliance with their security trustees, may push to enforce the loan conditions, which she explained might involve stripping the telecoms company to recover their investment.

Recalling what happened, Akinoye said that NCC, which she said was not privy to the loan agreements, got a letter on the June 21, 2017 from the Security Trustee of 9mobile, notifying the regulatory agency that there is a loan default and that the lenders (banks) want to enforce the legal implication.

She said the banks, which had already taken over the telecoms company, wanted the board of 9mobile to be dissolved and a neutral person brought in, preferably the Central bank of Nigeria (CBN).

To this end, she said the CBN Governor, who did not want the apex bank to become involved, however dissolved the old board and constituted a new board chaired by the CBN Deputy Governor, to ensure that the 20 million subscribers and 4,000 staff of 9mobile are not left high and dry.

On why NCC cannot allow the banks to take full ownership of the company, Akinoye said: “The transfer of licence is not allowed by NCC except under certain conditions but they can transfer the shares. The banks are only interested in getting their money but not to run the company.”

She also said that NCC, unlike CBN in the case of banks, does not have powers by the Act establishing it, to take over telecoms companies that are collapsing. Akinoye noted that given the way Mubadala and the associate paid $250 million to get the Etisalat licence, NCC never suspected that anything would go wrong, adding that NCC is already doing a forensic investigation of 9mobile.

On her part, Oluseyi Osusador, director of Corporate Affairs of 9mobile, who represented the telecoms company, told the Senate that $82 million and $100 million loans were collected for expansion of their services nationwide. She disclosed that they also collected $1.2 billion loan from a consortium of 13 banks for network expansion across the country in 2015.

She added that in the 2016, they paid their obligations as required until the negotiations broke down due to their inability to meet up, adding that efforts to secure a new agreement failed until the investors left, hence they are now looking for a new investor throughout Barclays Bank.

Responding to the accusation by senators that it did not follow the due diligence to monitor the loan and prevent the original investor from cashing out rapidly, Dr. Okwu Joseph Nnanna, CBN Director, Financial System Stability, who represented the apex bank at the hearing, said that CBN started intervening in the deal between 9mobile and the 13 banks before the loan started having issues of default.

He explained that contrary to comments, CBN did not take over Etisalat but the consortium of banks did based on their rights and legal conditions of the loan which allow them to take over the company at default.

Speaking on behalf of the affected banks, Guarantee Trust Bank, represented by Haruna Musa, a Director in the bank, said the banks are the facility agent, pointing out that their role is administrative in nature.

Haruna said that until 2015, the facility was performing optimally, adding that in some years, Etisalat paid more than expected, but paid 17% of what was expected in 2017, resulting in the commencement of the default.

In its submission, United Capital Trustees Limited, which served as the Security Trustee agent to the loan deal, represented by Tadeni Balogun, said it has other plans on how to deal with the situation but refused to give details.

While lamenting the default, Chairman of the Senate Committee, Rafiu Ibrahim, regretted that the loan became problematic three years into the commencement of the payment.

He asked the Security Trustee Company to explain how the founding Managing Director of Etisalat left the company, adding that the Senate needed to know if he was forced to leave or left voluntarily.

Senator Ibrahim expressed concern that shortly after the investors wrote to NCC, they left immediately and easily.

He said these information is necessary because the Senate may have to invite the Economic and Financial Crimes Commission (EFCC) to take over the investigation because the committee cannot understand why the investors hurriedly left and NCC and CBN are not doing anything to get the money back, perhaps by engaging the Nigerian President to engage the President of the host country of Etisalat to pay the debt.

To this end, he vowed that the Senate will not relent to save the banks and the industry, and the subscribers.