$1.2bn Loan: FG, Banks Disagree On Take-Over Of Etisalat

  • NCC Assures Subscribers Of Network Integrity Of Etisalat

The Federal Government has disagreed with a consortium of local and foreign banks for taking over the management of Etisalat Nigeria after debt restructuring talks with the banks failed.

Citing the Nigerian Communications Act (NCA) 2003, Section 38, Federal Government said it was too early for the banks to close-in on the debtor telco.

To this end, UAE’s Etisalat said on Tuesday that it has been instructed to transfer its 45 percent stake in Etisalat Nigeria to a loan trustee.

Etisalat Nigeria has 20 million subscribers, making the telco the country’s number four mobile operator with a 14 percent market share.

In the last few months, Etisalat Nigeria has been in talks with Nigerian banks to restructure a $1.2 billion loan after missing repayments.

The loan is a seven-year facility agreed with 13 banks in 2013 to refinance a $650 million loan and fund expansion of the telco’s network.

Although the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) stepped into the fray to prevent a takeover by the banks, those discussions failed to produce an agreement on restructuring the debt.

Etisalat said it had been notified to transfer its stake by June 23. It said the stake had a carrying value of zero on its books.

In a statement by Etisalat Nigeria, signed by Ibrahim Dikko, Vice President, Regulatory and Corporate Affairs, it stated that: “Etisalat Nigeria can now confirm the first stage of this has begun with a change in shareholding which was announced to the Abu Dhabi Stock Exchange this morning (Tuesday).

“Etisalat Nigeria can confirm discussions are on-going regarding other issues such as the trading name during this transition phase. Operations and services to our subscribers remain normal and will in no way be affected as we continue to deliver quality services to our subscribers.”
Dikko said, “We will continue to tap into the rich, creative and innovative resources within our workforce to build a stronger business upon the stable foundation we have laid in our nine years of operations.”
Dikko commended the efforts of stakeholders while the negotiations lasted.

“Etisalat Nigeria wishes to express its profound gratitude to the government, the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) for their patriotic zeal and tireless efforts at ensuring collaborative and productive engagement. We are also appreciative of the tremendous support we have received from the media since inception and we count on their continued support as we transition to a stronger business.

We will update our stakeholders and the public on further developments shortly,” the statement read.

Prior to the takeover, Etisalat said its financial exposure to Etisalat Nigeria was related to operational services worth 191 million UAE dirhams ($52 million) and that discussions were ongoing with lenders regarding the use of the Etisalat brand.

Meanwhile, the Federal Government on Tuesday said lenders cannot take over Etisalat Nigeria.

In a statement by Tony Ojobo, Director, Public Affairs, Nigerian Communications Commission, the Federal Government drew the attention of the banks to provisions of the Nigerian Communications Act (NCA) 2003 Section 38: “Sub-section 1 – The grant of a license shall be personal to the licensee and the license shall not be operated by, assigned, sub licensed or transferred to another party unless the prior written approval of the commission has been granted; “Sub section 2 – A licensee shall at all times comply by the terms and condition of the license and the provision of this act and its subsidiary legislation.”

NCC reassured the over 21 million Etisalat subscribers that it will do all within its regulatory power to ensure that Etisalat subscribers continue to enjoy the services provided by the operator.

“The commission has taken proactive steps to cushion the impact of the takeover; this is without prejudice to the ongoing effort between Etisalat and the banks toward negotiated settlement.

“In view of the recent development, NCC wishes to reassure all stakeholders in the telecommunications sector in particular the subscribers on the Etisalat network that the commission will ensure that the integrity of Etisalat network is not compromised”, Ojobo said.

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Hamilton Nwosa is an experienced, and committed communication, business, administrative, data and research specialist . His deep knowledge of the intersection between communication, business, data, and journalism are quite profound. His passion for professional excellence remains the guiding principle of his work, and in the course of his career spanning sectors such as administration, tourism, business management, communication and journalism, Hamilton has won key awards. He is a delightful writer, researcher and data analyst. He loves team-work, problem-solving, organizational management, communication strategy, and enjoys travelling. He can be reached at: hamilton_68@yahoo.com

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