Finally, 13 Banks Takeover Etisalat Over N541 Billion

This is outrageous! Following the failure of Etisalat Nigeria to pay up its loan amounting N541 billion, the telecomunications giant, yesterday, announced a share restructuring which will see 13 banks take over control of shares in the company. Meanwhile, Etisalat obtained the loans from 13 banks in 2013 which are; Guaranty Trust Bank, Access Bank, FCMB, Ecobank, Union bank, Stanbic IBTC Bank, Zenith Bank, UBA, Fidelity Bank, First Bank and other banks, to refinance its previous debt of $650 million in order to continue its network roll-out across the country.

Some bank investors relations team told Reuters that Etisalat owed GT Bank N42bn, Access Bank N40bn and Fidelity Bank N17.5bn. However, Ibrahim Dikko, Vice President, Regulatory and Corporate Affairs of Etisalat confirmed the development, saying;

Discussions are ongoing 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. 

“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,” it said.

Nevertheless, the firm sought receivable financing whereby it uses the money owed by its customers
as collateral for loans to purchase equipment or assets. Etisalat then proceeded with its lease back arrangement with IHS i.e to sell an item and then lease (or rent) that same item. Both the sale and the lease back were in dollars. Moreover, for Etisalat to pay up the loan in dollar, it needs to find more money because dollar is higher than naira and in this current recession, Etisalat need to struggle hard for the money. Not only the banks, Etisalat is also likely in debt with other GSM operators who they are obligated to pay inter-connectivity fees to.

The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) had intervened to prevent the takeover of the company, but their efforts did not yield the desired result.


Etisalat Nigeria has 20 million subscribers, according to Nigeria’s telecoms regulator, making it the country’s number four mobile operator; with a 14 per cent market share. South Africa’s MTN has 47 per cent, Globacom 20 per cent and Airtel – a subsidiary of India’s Bharti Airtel 19 per cent.

The UAE’s Etisalat owns 45 per cent of Etisalat Nigeria, while Abu Dhabi’s Mubadala owns 40 per cent of the company. The take-over came as a result of a futile effort by Emerging Markets Telecommunications Services, EMTS, promoted by-one time Chairman, United Bank for Africa, UBA, Hakeem Bello-Osagie, to reach agreement with the banks on debt restructuring plan in the protracted $1.72 billion (about N541.8 billion) debt impasse.

What do you have to say about this?




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Comments

  1. Reply

    Please I no its not page related but I need someone to assist do I need hosting for Google blog e.G blogspot

  2. Reply

    What did they use that loan for

  3. Reply

    But seriously can banks handle this kind of business
    i think they would probably sell the network and split the money among themselves.
    cause if they run it, how will they manage to share the profit?

  4. Reply

    I think this is a welcome development at least this will save d name Etisalat isok

  5. Reply

    Me I dey fear ooooooo na our body dem go wan Comot d money

  6. Reply

    This is a mind blowing money. OMG the money is too much oooo ah…make dem no use am affect us o abeg

  7. No ….you host free under Google

  8. To pay up their huge debts in order to roll over Nigeria

  9. Reply

    How are they going to pay this huge money???

  10. Reply

    this is serious but nothing is too big for God. they should do praying and fasting.

    how about that?

  11. Reply

    The debt is huge, how are they going to pay their bill in this kind of period

  12. Reply

    I hope it won't have an adverse effect on d customers like high data rates,call rates and so on,well d main cause z recession which I hope we get out of soon

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