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.
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