The CBN directed the consortium of 13 banks to suspend all further action on the debt, including attempt to take over ownership or management of Etisalat.
According to a source familiar with the matter, who spoke under the condition of anonymity, Etisalat Nigeria is also asking the banks to write off the debt, a move which the telco has attempted before but was turned by the banks.
Last week, sources with knowledge of the matter said the CBN directed the consortium of 13 banks to suspend all further action on the debt, including attempt to take over ownership or management of Etisalat.
The CBN made its intention known via a phone call between CBN Governor Godwin Emefiele and the leaders of the banks, Vanguard reports. An insider also told Vanguard that the banks have no intention of taking over the struggling telco.
“That is not the objectives of the bank. They are not interested and they are not taking over Etisalat. They did not request for the transfer of the shares of UAE’s Etisalat shares to United Capital. All they are pushing for is repayment of the loans. Don’t forget that the money does not belong to the banks but to their depositors,” said the insider, according to the Vanguard report.
Meanwhile, Etisalat also says that it has paid back 50% of the original loan amount and denied that it is under investigation by the Economic and Financial Crimes Commission (EFCC), as was previously reported by certain elements in the media.
In a statement, as reported by BizTechAfrica, Etisalat said: “The attention of Etisalat Nigeria has been drawn to media reports that the management of Etisalat Nigeria is being investigated by the EFCC, following a petition to “the Federal Government asking that Etisalat be investigated” on how the funds from the syndicated loans were utilised.
“Etisalat wishes to categorically affirm for the avoidance of doubt that the reports are patently false and most unfortunate considering the damage such misleading information can have not only on our business, but indeed on the telecoms industry and the country as a whole.
“A simple interrogation of the rigorous process for securing a syndicated loan from a consortium of reputable banks would have exposed the truth to the original writer of this story and other media channels who have subsequently re-circulated the falsehood without interrogation or verification.
“Concerned parties have access to our books and do not require an investigation into how the loan sum was utilised. All of the infrastructure investment and services for which the loan was secured, were paid through our banks and these are verifiable.
The statement criticized the media for failing to correctly inform the general public by providing the needful macro-economic context around which the challenges it encountered with servicing the loan facility.
The $1.2billion loan, a medium-term seven-year facility, was obtained by Etisalat Nigeria for the purpose of expanding its network and improving the quality of service on its network as well as servicing an earlier $650 million facility.
The economic downturn of 2015 and sharp devaluations of the Naira (as Nigeria battled a recession) negatively impacted on the dollar-denominated loan by driving up the loan value, which led Etisalat to request a loan restructuring from the consortium of banks.
“Contrary to the widely reported misrepresentations about Etisalat Nigeria’s debt obligation to the consortium of 13 banks, it has become pertinent to set the records straight. Prior to this time, Etisalat had in fact consistently and conscientiously met up with its payment obligations. As at today, we can categorically state that the outstanding loan sum to the consortium stands at $227 million and N113 billion, a total of about $574million if the naira portion is converted to US Dollars.
“This in essence means almost half of the original loan of $1.2 billion, has been repaid. Etisalat continued to service the loan up until February 2017, when discussions with the banks regarding the repayment restructuring commenced.
“We hereby appeal to our media partners to continue to uphold the ethics of the profession by exercising some restraint particularly in the publication of such misleading and damaging information. We have been accessible and remain available to the media to clarify or verify information when required,” Etisalat said in the statement, according to BizTechAfrica.
Negotiation are still ongoing on what will be the future of Etisalat. The NCC and CBN are also involved as the search for a reasonable solution continues. In the meantime, Etisalat still continues to operate as normal and will continue to do so unless there is a change in the current status quo. Pulse Tech will provide updates as they come.