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The Central Bank of Nigeria (CBN) and the Nigeria Communications Commission (NCC) on Friday intervened in the ongoing crisis between Etisalat and a consortium of 13 Nigerian Banks over a syndicated loan of about US$1.2 billion granted the telecom company by the banks.

The CBN in a statement by its Spokesman, Isaac Okorafor, said the move was necessary to prevent job losses and asset stripping.

“Although it should ordinarily not be the role of a regulator to decide how individual bad loans are resolved, the CBN believes that Etisalat is a systemically important telecommunications company with over 20 million subscribers that if not well handled, may have negative implications for the banking system itself,” Okorafor said.

He further explained that the CBN and NCC, sensing that banks might go ahead in the usual way and downsize the company's over 4,000 staff, reached an agreement to intervene and implore the consortium of banks to be reassess its position in dealing with Etisalat.

Okorafor described some media reports insinuating high-handedness by CBN on the issue as "the height of mischief and insensitivity" explaining that the collaborative move by the regulators was aimed at preventing job losses and asset stripping and to ensure that

Etisalat remains in business and is able to pay back the loans.

According to him, the CBN and the NCC, in the coming days, will meet with the syndicate of banks and the IHS Towers, the tower managers and the equipment suppliers, in order to achieve what he termed “a win-win outcome” for all stakeholders.

It will be recalled that Etisalat has been embroiled with a consortium of 13 Nigerian Banks that gave it a facility of about US$1.2 billion, on which the company has been unable to meet its repayment obligations in line with agreed terms of the facility.

Given the inability of Etisalat to come to an acceptable agreement with the banks, the largest shareholder in the company, Dubai-based Mubadala Development Company of the United Arab Emirates, has now pulled out of the company as well as the ongoing negotiations, leaving only their local partners, led by Hakeem Belo-Osagie, to carry the burden.

It was based on the attempt of the banks to take over the company that the financial and telecommunications regulators have moved in to intervene and forestall down-sizing and asset stripping

The consortium of 13 banks involved in Etisalat Nigeria loan on Thursday refuted reports that they have taken over the operations of the company.

A management source close to the banks who pleaded anonymity said in Lagos that there was no truth in the report making the round.

The source said that the banks’ major interest was the loan repayment borrowed by the company and not takeover.

“We are not telecommunication companies, all we want is our money,” he said.

The source said that the company must pay back the loans in order not to jeopardise the economy, jobs, payment of dividends and depositors funds.

He stated that it was not only the banks that would suffer but billions of Nigerians, even the vendors, and distributors doing business with the company.

“We did not take over Etisalat as being insinuated, if we have taken over, it has to be registered with the CAC.

“They are still doing their business, they just want to weep up sentiment at the United Arab Emirates,” the source added.

He added that the company had about 20 million subscribers, adding that any interruption would affect many businesses, especially SMES.

According to the source, the affected Nigerian banks are owed about $570m out of the $1.2bn syndicated loan with the balance being owed vendors and distributors, among others.

The source said that Etisalat wanted to pay only 10 per cent of the loan borrowed and requested that others should be written off as non-performing loan.

He said that Etisalat wanted the consortium of banks to pay $50m out of $570m being owed, which the banks rejected.

The source added that the banks practically reduced the debt to between 20 per cent and 30 per cent at a discounted interest rate of six percent below the market rate which was rejected by Etisalat.

“All we are requesting is for the Federal Government to wade into the issue and carry out due diligence on what the loan was used for.

“A foreign company cannot come and ride us in Nigeria, if this issue is not handled carefully, others will do the same thing,” the source said.

The source said that the company was avoiding negotiations which made the affected banks to fly to London earlier in the year to have a discussion with a company with its office in Nigeria.

He said that the company was advised earlier before naira devaluation to convert the foreign loans to local currency due to fall in oil price at the global market, which it also rejected.

UAE’s Etisalat had on June 20, said that it had been instructed to transfer its 45 per cent stake in Etisalat Nigeria to a loan trustee.

Etisalat said it had been notified to transfer its stake by June 23. It said the stake had a carrying value of zero on its books.

In the last few months, Etisalat Nigeria has been in talks with Nigerian banks to restructure a $1.2bn loan after missing repayments.

The loan is a seven-year facility agreed with 13 banks in 2013 to refinance a $650m and fund expansion of the telco’s network.

Although the Nigerian Communications Commission and the Central Bank of Nigeria stepped into the fray to prevent a takeover by the banks, those discussions failed to produce an agreement on restructuring the debt.

(NAN)

Strong indications emerged on Wednesday that a consortium of 13 banks, involved in Etisalat Nigeria’s 1.2 billion dollars loan is seeking the Federal Government’s intervention to investigate the management.

A management source close to the banks told the News Agency of Nigeria, NAN, in Lagos that the banks want the government, through the EFCC, to wade into the matter, by investigating what the company did with the loan.

The source alleged that the loans were siphoned and needed to be investigated by the EFCC, noting, there was no proof of what the company did with the loan.

He said that the affected banks had rolled out a lot of viable options to Etisalat for the loan to be restructured, but was rejected by the company.

The source said that the banks were not into telecommunications and had no intention of running Etisalat.

“All we want is to recover the loans; we cannot write off the loans as being demanded by Etisalat, because the company is viable,” the source stated.

The source said that Etisalat wanted the banks to write off the loan as non-performing, which was rejected because the company was doing well.

According to the source, the company wants injection of new capital, and this has been suggested to the majority shareholder.

The source said the government should investigate the matter with all seriousness, to dig out the truth.

NAN reports that UAE’s Etisalat on June 20 said that it had been instructed to transfer its 45 per cent stake in Etisalat Nigeria to a loan trustee.

Etisalat said it had been notified to transfer its stake by June 23. It said the stake had a carrying value of zero on its books.

NAN reports that in the last three months, Etisalat Nigeria had been in talks with the consortium of banks, to restructure a $1.2 billion loan, after missing repayments.

The loan is a seven-year facility, agreed with 13 banks in 2013, to refinance a 650 million dollar-loan, and fund expansion of the telecommunications network.

Although the Nigerian Communications Commission (NCC), and the Central Bank of Nigeria (CBN), stepped into the fray to prevent a takeover by the banks, those discussions failed to produce an agreement on restructuring the debt.

(NAN)

Despite intervention of the Nigerian Communication Commission, NCC, a consortium of some foreign and Nigerian banks, has taken over the management of Etisalat Nigeria, THE WHISTLER has learnt.

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