As palpable fear hangs over the fate of Etisalat Nigeria, there is every likelihood that reprieve may come the way of the telecommunications firm this week as the consortium of 13 banks have agreed to truce brokered by the banking and tecommunication regulators.
According to the acting Director, Corporate Communication of the Central Bank of Nigeria (CBN), Mr. Isaac Okorafor, both the apex bank and the Nigeria Communication Commission (NCC) would meet with the syndicate of banks and the HIS, the tower managers and the equipment suppliers, in order to achieve a win-win outcome for all parties
Okorafor explained that the apex bank and the Nigeria Communications Commission (NCC) decided to intervene in order to prevent job losses and asset stripping due to the deepening crisis between Etisalat and a consortium of 13 Nigerian banks over a syndicated loan of about US$1.2 billion granted the company by the banks.
Okorafor said: “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 domino effects on the banking system itself.”
He explained that the CBN and NCC, sensing that banks may 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 explained that the collaborative move by the regulators was aimed at foreclosing the outcome of job loss 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 HIS, the tower managers and the equipment suppliers, in order to achieve what he termed “a win-win outcome” for all stakeholders.
Recall 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 move in to take over the company that the financial and telecommunications regulators have moved in to intervene and forestall down-sizing and asset stripping.