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Nigeria: Why Banks Set To Takeover Etisalat

IT NEWS NIGERIA:
A consortium of 13 commercial banks have approached telecommunication regulator, the Nigeria Communications Commission(NCC) with the bid to take over the management of Etisalat Nigeria, over unpaid $1.2 billion loans extended to the operator more than two years ago.
The Nation reports that the development is a fallout of the difficult being faced by Etisalat in settling the loan. Already, the telecoms operator has approached the Central Bank of Nigeria (CBN) and the NCC for their intervention to prevent the takeover of the service provider.
Recall that it is in the public domain that in 2013 Etisalat Nigeria signed a US$1.2 billion medium term syndicated loan facility with consortium of Nigerian Banks. And the telco said it planned to use the proceeds to refinance the existing commercial medium term debt of $650 million and continue its network rollout across Nigeria to be able to service its over 15 million subscribers.
Also recall that the loan facility includes both Naira and US dollar tranches from a consortium of commercial banks in Nigeria, namely: Zenith Bank, Guaranty Trust Bank, First Bank, United Bank of Africa, Fidelity Bank, Access Bank, Ecobank, Keystone Bank, First City Monument Bank, FSDH Merchant Bank, Mainstreet Bank, Stanbic IBTC Bank and Union Bank.
Sources said the bank executives are waiting until today, March 7,when the “cure period” (a period of time when a party that breaches a contract can remedy the breach without penalty) will end.
It was learnt that the creditor banks plan to approach the telecom industry regulator, the Nigerian Communication Commission (NCC) “to update the Executive Vice Chairman Prof Umar Danbatta of the situation before any overture is made to possible buyers” for the company”.
But, a source close to the telco denied any plan to take over the telco explaining that its management was intact and working round the clock to offer quality services to its over 20 million customers across the country.
While confirming the Etisalat’s indebtedness, a Senior Executive of the company said the economic headwind had made the repayment a little difficult.
“Yes we raised funds from a consortium of banks about two years ago in the country. We have been making conscious efforts to repay the debts and we have indeed repaid part of it. We are engaging with the banks, negotiating with them with a view to coming out with a method of repaying the loan, : the source said.

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The 13 Creditor Banks
Zenith Bank
Guaranty Trust Bank
First Bank
United Bank of Africa
Fidelity Bank
Access Bank
Ecobank
Keystone Bank
First City Monument Bank
FSDH Merchant Bank
Mainstreet Bank
Stanbic IBTC Bank
Union Bank

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