Zenith bank declares provision on 30% of its loan to telecom company

Zenith Bank Plc has declared a provision on 30 percent of its loan to telecoms giant 9mobile.

The bank's chief executive officer Mr.Peter Amangbo disclosed this during a conference call with reporters on Monday August 14, 2017.

Mr. Peter describes the decision as a prudent measure for the bank owing to the fact that 9mobile is currently undergoing internal restructuring which is needed in order to attract new investor.

"We have taken about 30 percent ... as a provision which we believe is very prudent as the company is undergoing restructuring ... to prepare for a new investor," said Peter.

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9mobile, formerly known as Etisalat Nigeria is the fourth largest telecom group in the country.

The company was on the brink of collapse last month due to its failure to repay a loan of $1.2 billion taken from consortium of banks in Nigeria. Etisalat sited currency crisis and economic recession ravaging the country at the time as the reasons for its inability to fulfill the loan conditions.

The intervention of the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) prevented lenders from placing Etisalat into receivership which resulted in a board, management and name change.

The local banks which participated in 9Mobile's loan deal are: Zenith Bank GTBank, First Bank, UBA, Fidelity Bank, Access Bank, Ecobank, First City Monument Bank, Stanbic IBTC Bank and Union Bank.

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Meanwhile, In a syndicated announcement across social media platforms on July 18, 2017, Etisalat said the company will now be known as 9Mobile and made a point to emphasize that business was going to go on as usual.

“Emerging Markets Telecommunication Services Limited (EMTS), which previously traded as ‘Etisalat Nigeria’ wishes to inform its over 20 million subscribers, government, regulatory agencies and all relevant stakeholder groups that the telecommunication company has changed its name to 9mobile as a further testament of our unwavering commitment to ensuring business continuity as Nigeria’s fourth largest telecom operator,” read a statement from the company.