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Nigerian Banks take over Etisalat Nigeria
In 2015, the Teleco had approached a consortium of Nigerian commercial banks which include Access Bank, Guaranty Trust Bank and Zenith Bank Plc, for a loan of $1.2 billion to expand its operations and coverage in the company.
Etisalat Nigeria has facing financial challenges meeting the need repayments of the $1.2 billion credit facility gotten from a consortium of 1o commercials banks in Nigeria.
The Etisalat Group, the parent company of Etisalat Nigeria, in a letter (Ho/GCFO/152/85) to the Abu Dhabi Securities Exchange in United Arab Emirate on Tuesday, June 20, 2017, notified the exchange that its Nigerian subsidiary has been taking over with effect from June 15, 2017.
The group in the letter, which was signed by Etisalat Group Chief Financial Officer, Serkan Okandan, noted that the action is due to the failure and collapsed of the EMTS-led talk to restructure the repayment of the syndicated loan by a consortium of banks to Etisalat Nigeria.
“Further to our announcement dated 12 February, 2017, Emirates Telecommunications Group Company PJSC, “Etisalat Group” would like to inform you that Emerging Markets Telecommunications Services Limited “EMTS” (“the company), established in Nigeria and an associate of Etisalat Group with effective ownership of 45% and 25% ordinary and preference shares respectively, defaulted on a facility agreement with a syndicate of Nigerian banks (“EMTS Lenders”).
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“Subsequently, discussions between EMTS and the EMTS Lenders did not produce an agreement on a debt restructuring plan.
“Accordingly, the Company received a default and security Enforcement Notice on 9 June 2017 requesting EMTS Holding BV (EMTS BV) established in the Netherlands, and through which Etisalat Group holds its interest in the company) requiring EMTS BV to transfer 100% of its shares in the company to the United Capital Trustees Limited (the Security Trustee”) of the EMTS Lenders by 15 June 2017,” the letter reads in part.
It would be recalled that the Mubadala team led by its Group Deputy CEO, Waleed Al-Muhsin visited Nigeria on May 16, 2017, to talk with relevant stakeholders to stave off the takeover of its Nigerian business unit by creditor banks in the country.
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The filling to the Arab state bourse further revealed that: “… subsequently, the EMTS Lenders extended the deadline for the share transfer to 5.00 pm Lagos time on Friday, June 23, 2017.”
In 2015, the Teleco approached a consortium of Nigerian commercial banks which include Access Bank, Guaranty Trust Bank and Zenith Bank Plc, for a loan of $1.2 billion to expand its operations and coverage in the company. The company also had a Tower Rental Financing agreement with the IHS Towers.
The loan, which involved a foreign-backed guaranty bond, was for the mobile telephone operator to finance a major network rehabilitation and expansion of its operational base in Nigeria.
Etisalat Nigeria has been under pressure since 2016 due to its inability to enforce repayment of the loans and service debts to IHS Towers. The creditors, since then, have been threatening to invoke the receivership clause in the credit facility agreement.
With this disclosure, it means the move by both the Central Bank of Nigeria (CBN) and the Nigerian Communication Commission (NCC) to stop the take-over has yielded no results.
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