N541 billion Debt: Etisalat Nigeria to unveil new ownership structure

Following the takeover of Etisalat Nigeria by a consortium of banks, led by Access Bank Plc and other Nigerian and foreign banks, Emerging Markets Telecommunication Services Limited, EMTS, the telecom firm’s major owner now, said it would soon unfold a new shareholding structure Etisalat Nigeria.

After almost a week of negotiations with the consortium, Etisalat Group, the parent company of Etisalat Nigeria, announced on Tuesday that efforts by EMTS, promoted by one-time Chairman, United Bank for Africa, UBA, Hakeem Bello-Osagie, to negotiate a payment restructuring plan for the $1.72 billion (about N541.8 billion) debt failed to yield an agreement with the banks.

In its filing to the Abu Dhabi Securities Exchange in Abu Dhabi, United Arab Emirate, Chief Financial Officer, Etisalat Group, Serkan Okandan, said the takeover of the company followed a default and security Enforcement Notice received on June 9.

The notice directed EMTS Holding BV, the holdings company of EMTS, established in the Netherlands, to transfer 100 per cent of its shares in Etisalat Nigeria to the United Capital Trustees Limited on behalf of the banks on or before last Thursday, June 15, 2017.

Although the EMTS was granted an extended deadline till next Friday, June 23 2017, to complete the share transfer process, the Vice President, Regulatory & Corporate Affairs, Etisalat Nigeria, Ibrahim Dikko, said the company had commenced the restructuring process with changes to its shareholding.

“Etisalat Nigeria can now confirm the first stage of this has begun with a change in shareholding which was announced to the Abu Dhabi Stock Exchange this morning (Tuesday),” Mr. Dikko said in a statement.

As part of the restructuring, he said discussions were on-going regarding other issues, including the new trading name for the company during the transition phase.

Mr. Dikko assured its over 21 million subscribers that the latest development would not affect its normal operations and the continued delivery of quality services.

“We will tap into the rich, creative and innovative resources within our workforce to build a stronger business upon the stable foundation we have laid in our nine years of operations,” he said.

Last Thursday, PREMIUM TIMES reportedly exclusively that Etisalat Nigeria Limited, Nigeria’s fourth largest telecommunication firm, was swimming deeper in troubled business waters, as its largest shareholder, Mubadala Development Company of United Arab Emirates, had concluded plans to pull out its investment and head out of Nigeria.

Trouble started for Etisalat Nigeria in 2016, following its failure to meet its obligation in respect 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.

Failure to meet the debt servicing obligations agreed to since 2016 result in the consortium, prodded by their foreign partners, issuing a threat to take over the company and its assets across Nigeria.

The intervention of the NCC merely helped in postponing the evil day. The invitation of the CBN to be involved in the negotiations succeeded in persuading the banks to give Etisalat a chance to renegotiate the loan’s repayment schedule.

But, Etisalat Nigeria also faltered on the May 31 repayment deadline it gave the banks, resulting in a final defaulting note and enforcement notice issued on June 9, 2017 empowering the banks to swoop on the company and takeover. .

The inability of the management of Etisalat Nigeria to make any meaningful progress in its negotiations angered Mubadala, providing it with the reason to make up its mind to walk away from the business.

With the takeover of Etisalat Nigeria by the consortium of banks, it was not clear on Tuesday whether UAE investor would have any new role to play.