- CBN, NCC, make move to resolve crisis
A leading telecommunication firm, Etisalat Nigeria on Tuesday began a share restructuring of the company which will see 13 commercial banks take over control of shares in the company.
This followed the failure of Etisalat to offset the remainder of the $1.2 billion syndicated loan granted it to expand its operations in 2013.
The banks, which include Access Bank, Zenith Bank Plc, Guaranty Trust Bank Plc, FirstBank Limited, Fidelity Bank Plc, First City Monument Bank (FCMB), Stanbic IBTC, EcoBank, United Bank for Africa (UBA) Plc and Union Bank of Nigeria Plc, among others, said they would take over Etisalat’s operations through its legal representative, United Capital Trustees.
According to a statement on Tuesday, Ibrahim Dikko, Vice President, Regulatory and Corporate Affairs of Etisalat, confirming the development, that the negotiations with the consortium of lenders were considering a number of possible options.
Etisalat Group, the parent company of Etisalat Nigeria, announced the takeover officially yesterday in a corporate disclosure filed to the Abu Dhabi Securities Exchange in Abu Dhabi, United Arab Emirate.
Some of the options on offer may include, bringing in new equity partners or going into a merger with other industry players. The norm in other jurisdictions is to have between one to three major operators in the telecoms sector.
The statement further added that: “Discussions are ongoing regarding other issues such as the trading name during this transition phase. Operations and services to our subscribers remain normal and will in no way be affected as we continue to deliver quality services to our subscribers.
“We will continue to 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,” it said.
The telecommunications company had obtained the loans from 13 banks in 2013 – Guaranty Trust Bank, Access Bank, Zenith Bank, UBA, Fidelity Bank and First Bank, among others to refinance an existing commercial medium term debt of $650m and continue its network rollout across the country.
Some of the bank’s investor relations team told Reuters that Etisalat owed GTBank N42bn, Access Bank N40bn and Fidelity Bank N17.5bn.
Etisalat Group 30 per cent and the remaining 30 per cent is owned by Nigerian shareholders led by Mr. Bello Hakeem-Osagie, the chairman of Etisalat Nigeria.
Meanwhile, the NCC has assured Etisalat subscribers of network integrity.
According to a statement signed by its director of public affairs, Tony Ojobo, the NCC said, ‘‘The attention of the Commission has been drawn to a planned takeover of Etisalat by a consortium of banks.
‘‘The Commission is aware of the indebtedness of Etisalat to the consortium of banks. In conjunction with the Central Bank of Nigeria (CBN), it mediated by holding several meetings with the banks, Etisalat and other stakeholders with a view to finding a resolution. Regrettably, these meetings did not yield the desired results.
‘‘The NCC wishes to reassure the over 21 million Etisalat subscribers that it will do all within its regulatory power to ensure that Etisalat subscribers continue to enjoy the services provided by the operator. The Commission has taken proactive steps to cushion the impact of the takeover; this is without prejudice to the ongoing effort between Etisalat and the banks toward negotiated settlement.
‘‘In view of the recent development, NCC wishes to reassure all stakeholders in the telecommunications sector in particular the subscribers on the Etisalat Network that the Commission will ensure that the integrity of Etisalat Network is not compromised”.
The Commission also drew the attention of the banks to provisions of the Nigerian Communications Act (NCA) 2003 Section 38.