Following
the seeming collapse of talks between Etisalat Nigeria and a consortium
of Nigerian giant banks, the financial institutions have moved and
taken over the telecom firm.
File photo (Etisalat office)
A consortium of banks, led by Access Bank PLC and other Nigerian
and foreign banks, has taken over the management of Etisalat Nigeria,
effective June 15.
The takeover followed the collapse of the effort by Emerging
Markets Telecommunications Services, EMTS, promoted by-one time
Chairman, United Bank for Africa, UBA, Hakeem Bello-Osagie, to reach
agreement with the banks on debt restructuring plan in the protracted
$1.72 billion (about N541.8 billion) debt impasse.
However, EMTS Holding BV, established in the Netherlands, has up to
June 23 to complete the transfer of 100 percent of the company’s shares
in Etisalat to the United Capital Trustees Limited, the legal
representative of the consortium of banks.
Etisalat Group, the parent company of Etisalat Nigeria, announced
the takeover on Tuesday in a filing to the Abu Dhabi Securities Exchange
in Abu Dhabi, United Arab Emirate.
The filing, with reference number Ho/GCFO/152/85, and dated June
20, 2017 signed by Etisalat Group Chief Financial Officber, Serkan
Okandan, said efforts by EMTS to restructure the repayment of the
syndicated loan by a consortium of banks to Etisalat Nigeria collapsed.
“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”).
“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.
“Subsequently the EMTS Lenders extended the deadline for the share transfer to 5.00 pm Lagos time on 23 June 2017,” the filing said.
Etisalat has been under pressure since 2016, following the demand
notice for the recovery of a $1.72 billion (about N541.8 billion) loan
facility it obtained from a consortium of banks in 2015.
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.
Unable to meet its debt servicing obligations agreed since 2016,
the consortium, prodded by their foreign partners, threatened to take
over the company and its assets across the country.
But the intervention of the telecom sector regulator, Nigerian
Communications Commission, NCC, and its financial sector counterpart,
the Central Bank of Nigeria, CBN, persuaded the banks to rethink their
threat and give Etisalat a chance to renegotiate the loan’s repayment
schedule.
Late last week, Etisalat was sinking deeper into trouble, with
Mubadala, its majority shareholder, representing Etisalat of UAE, on the
verge of pulling out following irreconcilable differences concerning
the loan issue.
Source: Premium Times
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