Indications are that the Nigeria monetary authorities are not happy with the way and manner Etisalat Abu Dhabi has acted in the debt saga that is consuming its Nigerian subsidiary.
Those with the knowledge of what is happening in the financial circle told Businessnewsreport.com.ng Etisalat that Abu Dhabi did not inform the Nigerian authorities of its plan to divest from Nigeria. A source said that the CBN sees the action as amounting to abandoning the company’s monumental obligation in Nigeria.
This it was gathered includes N541 billion syndicated and bilateral loans approved by 13 banks in Nigeria, now delinquent; unpaid taxes and levies due to the federal government and regulatory authorities, other third parties including vendors, service providers and contractors.
The source said that the action of Abu Dhabi Etisalat is tantamount to ignoring and disregarding the commercial contract of Nigeria. The source further said that Nigerian banks have not been involved in the ownership of Etisalat Nigeria and therefore in no position to transfer or retain any percentage of Etisalat Nigeria shares.
The source said “We gathered that the facilities approved by the banks for Etisalat fell due for payment and the company has serially defaulted on payment. Part of the facilities have become delinquent while the sponsor and management of Etisalat Nigeria were not forthcoming with the various restructuring options proposed by the banks.
“The banks have no intentions of taking over ownership of Etisalat Nigeria. We were reliably informed that while other operators sold their towers and utilised the entire sales proceeds to repay their loans, Etisalat Nigeria in 2014 sold its towers and did not apply the sales proceeds to repay its loan.”
Etisalat Nigeria had said that the outstanding on the $1.2 billion syndicated loan is about N165 billion. It said that the $1.2 billion loan was efficiently serviced up until early this year when discussions with the banks commenced. It said that over 50 per cent of the original loan amount has been paid off.
The Telecom firm said in a fact sheet statement that it is renegotiating the terms of a $1.2 billion loan with a syndicate of 13 Nigerian banks.
It said that Etisalat Nigeria’s engagements to renegotiate the terms of the loan have gone on for a while and are yet to be finalised though at an advanced stage. According to the statement “Some of the options being considered include a restructuring of the shareholding/change in ownership. Final arrangements regarding ownership and board structure are still in development stage.
“Etisalat Group has announced to the Abu Dhabi Stock Exchange that they are transferring their shares in the company to an appointed security trustee of the banks. The announcement by Etisalat Group is to the effect that they are transferring their shares in Etisalat Nigeria to a security trustee who will hold the shares on behalf of the consortium.
“The security trustee is the vehicle employed by the banks to hold the shares on behalf of the consortium. What has effectively happened is a ‘change in ownership’ not a receivership, bankruptcy or winding up so operations will continue to run and subscribers can continue to access services on the network as usual.
It further said “There are no plans to lay off staff. The discussions with the banks have been on for a while and Etisalat has met its obligations to staff during this time. So long as the business continues, and from all indication it will, the company will sustain its side of the bargain. Management and the banks are in full agreement over the unhindered operations of the business and efforts are on to ensure the day to day operations are not affected and subscribers’ customer experience remains top notch”.
It said “Etisalat Nigeria will undergo a transition period while it works with the banks to secure new investors. With new investors, there is a possibility of a change in brand but this will become clear once the restructuring has been concluded. Discussions are still on to close out on the finer details of the agreements. Etisalat’s strategic goals remain unchanged; to serve customers with excellence, continue to innovate and maintain network quality.”
According to the service provider “The loan was acquired in 2013 as a medium-term 7-year facility to fund expansion of the network. The economic downturn of 2015 led to sharp devaluations of the Naira which negatively impacted on the value dollar-denominated loan. Naira devaluation and restricted access to foreign exchange/dollars is a problem faced by several companies across all sectors of the economy not just Etisalat Nigeria or the telecommunication sector.
