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Etisalat May Leave Nigeria Over $1.2bn Loan Default: Metro : Nigerialog.com - Nigeria's Premier Online Forum

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Etisalat May Leave Nigeria Over $1.2bn Loan Default

By: Adenosine (M) |Time : March 14, 2017, 10:04:06 AM
By Taboola



Stanley Opara with agency report
Abu Dhabi telecoms group , Etisalat, may sell its stake in Etisalat Nigeria , which has defaulted on a $ 1 .2 bn loan, but wants the company’ s debt restructured before it does so , Reuters quoted two sources as informing it on Monday.

The Central Bank of Nigeria and the Nigerian Communications Commission on Friday agreed with local banks to pursue a default deal rather than a receivership for Etisalat Nigeria so as not to deter investors and to avoid a wider debt crisis .

Etisalat is due to meet with creditors on Tuesday (today) or Wednesday to discuss the default , the sources said .

It was not clear whether Etisalat , which has a 45 per cent holding in the Nigerian unit after converting a loan to equity in February , would divest completely .

The Senior Vice - President of Etisalat, Ahmed Bin Ali , according to Reuters, declined to comment , while Etisalat Nigeria could not be reached .

“ It is at an early stage,” one source said of the sale .

Last week a banking source told Reuters that the Nigerian affiliate of Etisalat had given notice to its lenders that it would miss a payment in February , but the two sides have yet to agree terms .

Etisalat Nigeria signed a $ 1 .2 bn medium- term facility with 13 indigenous banks in 2013, which it used to refinance an existing $ 650m loan and modernise its network.

But an economic downturn , a currency devaluation and dollar shortages on Nigeria ’s interbank market led to it missing payment , the Vice - President for regulatory affairs at Etisalat Nigeria , Ibrahim Dikko , said.

Banks involved in the loan include Zenith Bank , GTBank , First Bank , UBA, Fidelity Bank , Access Bank , Ecobank, FCMB, Stanbic IBTC Bank and Union Bank .

Abu Dhabi state investment fund , Mubadala , which has a 40 per cent stake in Etisalat Nigeria , wants a solution found , another source said. Mubadala declined to comment.

Etisalat has been hit hardest among foreign firms by dollar shortages in Nigeria . Firms that invested in the country in the era of high oil prices are struggling to repay loans or keep operating as the oil producer suffers from a slump in oil revenues , hitting its currency and dollar reserves .

Etisalat’s Chief Strategy Officer, Khalifa Hassan al- Forah al- Shamsi , told Reuters that it was making sure that in markets where there were currency fluctuations, operating costs were in local currencies . Though he was not responsible for Nigeria .

Etisalat Nigeria has 20 million subscribers , according to Nigeria ’s telecom regulator , making it the country ’s number four mobile operator with a 14 per cent market share . South Africa’s MTN has 47 per cent ; Globacom, 20 per cent ; and Airtel , a subsidiary of India ’s Bharti Airtel , 19 per cent .

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