BREAKING: Three Banks To Take Over Etisalat Nigeria Over N541.8 Billion Debt

Despite the intervention of the Nigerian Communication Commission,
NCC, to broker a peaceful resolution between Etisalat Nigeria and a
consortium of banks, it appears the effort may not have yielded a
truce, as the banks are set to take over the telecoms firm today
(Wednesday), PREMIUM TIMES learnt.

The consortium of some foreign and Nigerian banks, including Guaranty
Trust Bank, Access Bank and Zenith Bank, have been having a running
battle with the mobile telephone operator over a loan facility
totalling $1.72 billion (about N541.8 billion) obtained in 2015.
The loan, which involved a foreign-backed guaranty bond, was for
Etisalat to finance a major network rehabilitation and expansion of
its operational base in Nigeria.

However, following the failure of the company to meet its debt
servicing schedule agreed since 2016, the three Nigerian banks,
prodded by their foreign partners, reported Etisalat to banking sector
regulator, the Central Bank of Nigeria, CBN, and its communications
sector counterpart, the NCC.

Although Etisalat blamed its inability to fulfil its obligation to the
banks on the current economic recession in Nigeria, the banks said
their attempt to recover the loan by all means was fuelled by the
pressure from the Asset Management Company of Nigeria, AMCON,
demanding immediate cut down on the rate of their non-performing
loans.

A senior official of one of the banks who spoke with PREMIUM TIMES
late on Tuesday said one of the options they have proposed to Etisalat
management as a middle way out of the crisis was for it to request for
a bankruptcy status.
The official, who requested that his name should not be revealed,
since he was not authorised to speak on behalf of the consortium, said
the bankruptcy option would require having receivership management
appointed by the banks to oversee its operations.

But, the NCC appears not to be favourably disposed to the takeover
proposal, the source said, as it believes Etisalat was not only a
viable going concern, but also willing and able to negotiate its loan
servicing.

However, atop source at the NCC said late Tuesday that the commission
had approved the takeover, which is expected to occur today.
Etisalat is Nigeria's fourth largest telecoms operator, with about 21
million subscribers as at January 2017, according to the NCC. It
commenced business in Nigeria in 2009.
More details later…