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N540 BN Debt! Three Nigerian Banks Take-Over Etisalat Nigeria

It is being reported that Nigeria’s
fourth largest telecomms operator – Etisalat is being taking over by a
consortium of foreign and Nigerian banks, including Guaranty Trust Bank,
Access Bank and Zenith Bank.

The takeover comes as a result of the telecoms company defaulting on a $1.72 billion loan.
According
to reports the Nigerian Communication Commission, NCC tried to broker a
peaceful resolution between Etisalat Nigeria and the consortium but
their efforts failed.

Premium Times
reports that the consortium has been in a running battle with the
telecoms operator over a loan facility totalling $1.72 billion (about
N541.8 billion) which was obtained in 2015.
The loan, which
involved a foreign-backed guaranty bond, was for Etisalat to finance a
major network rehabilitation and expansion of its operational base in
Nigeria.

Following the failure of the company to meet its debt
servicing schedule agreed on in 2016, the three Nigerian banks, prodded
by their foreign partners, reported Etisalat to banking sector
regulator, the Central Bank of Nigeria, CBN, and its communications
sector counterpart, the NCC.
Etisalat however blamed its inability
to fulfil its obligation to the banks on the current economic recession
in Nigeria. It would appear Etisalat were also advised to file for
bankruptcy.

A senior official of one of the banks who spoke with
PREMIUM TIMES said one of the options proposed to Etisalat management as
a middle way out of the crisis was for it to request for a bankruptcy
status. Etisalat which commenced operations in Nigeria in 2009, has an estimated 21 million subscribers.

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