N541.8 billion debt: CBN, NCC move to stop Nigerian banks from taking over Etisalat

An Etisalat Office

The Central Bank of Nigeria, CBN, and the Nigerian Communications Commission, NCC, on Thursday moved to stop a consortium of Nigerian banks from taking over mobile telecoms firm, Etisalat Nigeria, over a $1.72 billion (about N541.8 billion) loan crisis.

Following a meeting in Abuja on Thursday between the Executive Vice Chairman of NCC, Umar Danbatta, and the Central Bank of Nigeria Governor, Godwin Emefiele, both men resolved to intervene in the loan crisis, after the banks threatened to take over the operations of the telecoms firm.

The consortium of some foreign and Nigerian banks, including Guaranty Trust Bank, Access Bank and Zenith Bank, has been having a running battle with Etisalat over a $1.72 billion (about N541.8 billion) loan facility obtained in 2015.

The loan, which involved a foreign-backed guaranty bond, was for Etisalat to finance a major network rehabilitation and expansion of its operational base in Nigeria.

However, following the failure of the company to meet the debt servicing schedule agreed since 2016, the three Nigerian banks, prodded by their foreign partners, reported Etisalat to the NCC, threatening to take over the company.

Etisalat blamed its inability to fulfil its obligations to the banks on the current economic recession in Nigeria, sources said, adding that the NCC had intervened with a plea to the banks to relax their tough stance on the issue.

PREMIUM TIMES learnt the NCC was not favourably disposed to the takeover bid by the banks, believing Etisalat, the fourth largest telecoms operator in the country, was still strong and formidable business-wise, and was also willing and able to negotiate the servicing of its loan obligations.

The NCC, as the regulator of the telecoms industry, made the point that allowing the banks to take over Etisalat would bring negative consequences on the industry.

The spokesperson of NCC, Tony Ojobo, said in a statement on Thursday that the regulator was worried about the fate of the over 20 million Etisalat subscribers and the wrong signals a takeover of Etisalat may send to potential investors in the telecom industry.

Consequently, at the meeting between the Central Bank governor and NCC Vice Chairman, deliberations centred on how best to stave off the takeover.

At the end of the meeting, convened at the CBN Headquarters in Abuja at the instance of the NCC, the financial sector regulator agreed to invite Etisalat management and the affected banks to a crucial meeting on Friday, to find an amicable resolution of the crisis.

On their part, the banks said their line of action against Etisalat was informed by the enormous pressure from the Asset Management Company of Nigeria, AMCON, demanding immediate cut down on the rate of their non-performing loans.

A senior official of one of the affected banks who spoke with PREMIUM TIMES late on Tuesday said one of the options they proposed to Etisalat management as a middle way out of the crisis was for it to request for a bankruptcy status.

The official, who requested that his name not be revealed, since he was not authorized to speak on behalf of the consortium, said the bankruptcy option would require having receivership management appointed by the banks to oversee its operations.

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