A report published on Premium Times has revealed that a group of both local and international banks will be taking over Etisalat Nigeria today, Wednesday, March 8, as a result of a N541.8 billion debt.
The move is sequel to a failed attempt by the Nigerian Communication Commission, NCC, to negotiate a peaceful resolution between the telecommunication company and the consortium of banks.
According to the report some Nigerian banks, including Guaranty Trust Bank, Access Bank and Zenith Bank alongside some foreign banks, have been having a running battle with the mobile telephone operator over a loan facility which sums up to $1.72 billion (about N541.8 billion) secured in the year 2015.
The obtained loan involved a foreign-backed guaranty bond and was used by Etisalat for the financing of a major network rehabilitation and expansion of its operational base in Nigeria.
However, following the failure of the company to meet its debt servicing schedule agreed since 2016, the three Nigerian banks, persuaded by their foreign partners, reported Etisalat to banking sector regulator, the Central Bank of Nigeria, CBN, and its communications sector counterpart, the NCC.
Even though Etisalat company said its inability to fulfill its obligation to the banks was due to the present economic recession in Nigeria, the banks on their revealed that their attempt to recover the loan, by all means, was intensified by the pressure from the Asset Management Company of Nigeria, AMCON, making a demand for the rate of their non-performing loans to be cut down immediately.
Speaking with the news media late on Tuesday, a senior official of one of the banks who requested that his name should not be revealed, since he was not authorised to speak on behalf of the consortium, said one of the alternatives they have suggested to the management of Etisalat as a middle way out of the crisis was for it to request for a bankruptcy status.
The bankruptcy option, the official explained, would require having receivership management appointed by the banks to oversee its operations.
However, the source said the NCC appears not to be favourably disposed to the takeover proposal, as it believes Etisalat was not only a viable going concern, but also willing and able to negotiate its loan servicing.
As sad as it is, a top source at the NCC said on Tuesday that the commission had approved the takeover, which is expected to happen today.
Etisalat is Nigeria’s number four largest telecommunications operator, with about 21 million subscribers as at January 2017, according to the NCC. It kicked off business in Nigeria in 2009.