The Oasis Reporters
June 24, 2017
The Central Bank of Nigeria (CBN) has waded into the Impasse between Etisalat and a consortium of 13 Banks.
Joining them to stave off the likelihood of job losses and asset stripping in the ripple effects of a sudden takeover, is the Nigeria Communications Commission (NCC)
The bone of contention is over a syndicated loan of about US$1.2 billion granted the company by the banks.
Confirming the intervention of the two regulators in the loan dispute, the CBN Spokesman, Isaac Okorafor said: “Although it should ordinarily not be the role of a regulator to decide how individual bad loans are resolved, the CBN believes that Etisalat is a systemically important telecommunications company with over 20 million subscribers that if not well handled, may have domino effects on the banking system itself.
He further explained that the CBN and NCC, sensing that banks may go ahead in the usual way and downsize the company’s over 4,000 staff, reached an agreement to intervene and implore the consortium of banks to reassess its position in dealing with Etisalat.
Okorafor explained that the collaborative move by the regulators was aimed at ensuring that Etisalat remains in business and is able to pay back the loans.
According to him, the CBN and the NCC, in the coming days, will meet with the syndicate of banks and the HIS, the tower managers and the equipment suppliers, in order to achieve what he termed “a win-win outcome” for all stakeholders.
It will be recalled that Etisalat has been embroiled with a consortium of 13 Nigerian Banks that gave it a facility of about US$1.2 billion, on which the company has been unable to meet its repayment obligations in line with agreed terms of the facility.
When it became apparent that Etisalat could nottcome to an acceptable agreement with the banks, the largest shareholder in the company, Dubai-based Mubadala Development Company of the United Arab Emirates, has now pulled out of the company as well as the ongoing negotiations, leaving only their local partners, led by Hakeem Belo-Osagie, to carry the burden.
The move of the CBN and the NCC was to preempt the attempt of the banks to move in and take over the company so as to forestall down-sizing and asset stripping.
Etisalat had been instructed to transfer its 45 per cent stake in Etisalat Nigeria to a loan trustee after debt restructuring talks with lenders failed, the company had said on Tuesday.
The Abu Dhabi telecoms company said in a statement that Etisalat Nigeria had been in talks with Nigerian banks to restructure a $1.2 billion loan after missing repayments.
The company said that the discussions failed to produce an agreement on restructuring the debt.
Etisalat said it had been notified to transfer its stake by June 23, adding that the stake had a carrying value of zero on its books.
In a Daily Trust report, an Etisalat Nigeria spokesman was quoted as saying that the company was still in discussions with lenders to find a “non-disruptive” solution.
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.
Etisalat Nigeria on that same Tuesday announced changes to its shareholding at the Abu Dhabi Stock Exchange, a move that is said to be the first stage of it’s restructuring among which is the trading name during this transition phase.
However it assures that it’s operations and services will remain normal to subscribers and will in no way be affected as customers are sure to get quality services.
“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 9 years of operations,” read the statement issued by the Vice President, Regulatory & Corporate Affairs, Ibrahim Dikko.
The telco expressed, “profound gratitude to the Government, the Nigerian Communications Commission, (NCC) and the Central Bank of Nigeria 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.