Access Bank, others, take over Etisalat Nigeria- Here's what went wrong

Etisalat Nigeria, Nigeria’s fourth largest telecom operator, ran into trouble with the consortium of banks, led by Access Bank PLC, following its failure to meet its obligations in respect of a $1.72 billion (about N541.8 billion) loan facility it obtained in 2015.

The loan, which involved a foreign-backed guarantee bond, was for the mobile telephone operator to finance a major network rehabilitation and expansion of its operational base in Nigeria.

After the repayment of the loan failed in 2016, the consortium, with the backing of their foreign partners, threatened to take over the company and its asset across Nigeria.

The intervention of the NCC and the CBN persuaded the banks to give Etisalat a chance to renegotiate the loan repayment schedule.But, the company also reneged on the pledge to pay up by May 31, resulting in a final default note and enforcement notice issued on June 9, 2017.

EMTS has already announced the commencement of the process to unveil a new shareholding structure and new trading name for the company during the transition phase.

Etisalat Group, the parent company of Etisalat Nigeria, on Tuesday announced the changes to Etisalat Nigeria’s shareholding in a letter filed to the Abu Dhabi Securities Exchange in Abu Dhabi, United Arab Emirate.

UAE’s Etisalat (Etisalat Group), with a 45 per cent stake in the Nigerian arm, also said it had been ordered to transfer its shares to a loan trustee by June 23, after negotiations failed, Reuters reported. It added it was carrying the stake at nil value.

The Emerging Markets Telecommunication Services Limited, also known as Etisalat Nigeria, has up to June 23, 2017 to complete the transfer of 100 per cent of the company’s shares in Etisalat Nigeria to the United Capital Trustees Limited, the legal representative of the consortium of 13 banks.

While assuring its subscribers that the latest development would not affect its normal operations and the continued delivery of quality services, Etisalat Nigeria Vice President, Regulatory & Corporate Affairs, Ibrahim Dikko, said the company would mobilise its workforce to build a stronger business.

The NCC has reassured the over 21 million telephone subscribers on the Etisalat Nigeria network that it is committed to exercising its full regulatory powers to guarantee stable and quality services by the operator.

“The Commission has taken proactive steps to cushion the impact of the takeover,” Mr. Ojobo said. “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.”

He also drew the attention of the consortium of banks involved in the planned takeover of the terms and conditions that guided the award of an operational license to Etisalat Nigeria, indicating that they would need the permission of the NCC before the license is assigned or a new operator comes on board in compliance with the NCC Act 2003.