Banks take control of defaulting Etisalat Nigeria
The Etisalat Group has lost control of its Nigerian offshoot after banks moved to take over its shareholding, because of an unpaid $1.2 billion loan.
Transfer of the shareholding took place yesterday, before a deadline set by the banks of close of business on Friday 23 June.
Now the new owners are in discussion about whether the Nigerian company – officially Emerging Markets Telecommunication Services (EMTS) – can continue to use the Etisalat brand for its operations.
Etisalat Group CFO Serkan Okandan told the Abu Dhabi Securities Exchange, where its shares are listed, that the group owned 45% of the ordinary shares in EMTS and 25% of the preference shares. These shares have been transferred to the banks.
Discussions since February “did not produce an agreement” and the group “received a default and security enforcement notice”, he said.
“The carrying value of these shares in Etisalat Group’s books is nil.” The remaining financial exposure is related to operational services, such as international roaming, and management and related services.
“There is nothing further that we can comment on or disclose for the moment,” Okandan told Capacity this morning.
Lere Ojedokun, a spokesman for Etisalat Nigeria, said that “discussions are ongoing regarding other issues such as the trading name during this transition phase”.
He added: “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.”
Ibrahim Dikko, Etisalat Nigeria’s vice president for regulatory and corporate affairs, said: “We are also appreciative of the tremendous support we have received from the media since inception and we count on their continued support as we transition to a stronger business. We will update our stakeholders and the public on further developments shortly.”
He said in a statement: “Negotiations with the consortium of lenders are considering a number of possible options.”
Etisalat Nigeria had been in financial difficulty since last year, when the banking consortium first said it wanted to take over the company. The regulation – the Nigerian Communications Commission – and the Central Bank of Nigeria persuaded them to hold off, but negotiations were unsuccessful.
One of the suppliers to be affected by the default may be Nokia, which had a managed services contract, signed in 2014, due to expire this year.