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/152/87, and dated June 20,
2017 signed by Etisalat Group Chief Financial Officer, 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, PREMIUM TIMES reported exclusively that 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.
