By IBIRONKE WILLIAMS
THE uncertainty surrounding Etisalat, Nigeria’s fourth largest mobile operator that was enmeshed in a debt crisis with 13 creditor banks, appears to have dissolved seamlessly on the heels of a restructuring plan that has put an interim management in place. Things are more or less back to normal and the moment of panic has fizzled out.
The new team comprises of the representatives of the consortium of 13 banks, the stakeholders, the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC).
As part of the agreement reached on the seamless transition, media reports listed Boye Olusanya, a former deputy managing director of Celtel Nigeria, as the new chief executive officer, replacing Matthew Willsher, while Funke Ighodaro was named to take over from Olawole Obasunloye as chief finance officer. Also, a deputy governor of the Central Bank, Joseph Nnana, was named Chairman of the board, taking over from Hakeem Belo-Osagie, who resigned after ensuring that a win-win agreement was put in place.
It was reported that Belo-Osagie had earlier planned to leave immediately the banks made the take-over move, but was prevailed upon to tarry a while until a roadmap for the company was finalised. This much was confirmed by an official statement announcing the pullout of the erstwhile chairman: “The timing of the resignation was strategically delayed till now when stakeholders have agreed to a plan and comes more than a week after Mubadala Development Company directors tendered their resignation. The development also reflects Belo-Osagie’s deep commitment to protecting the interest of all stakeholders.”
The road to the current challenges with the Consortium of 13 Banks was against the background of the $1.2billion loan to fund its expansion project in 2013. The company was said to be servicing the loan until current devaluation and the attendant mis-match with the dollar which impacted negatively on the company’s ability to meet up with its obligations to the banks.
The banks attempted a take-over in 2017 but were prevented by the intervention of the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC), which got the parties to fresh rounds of discussions to find amicable ways of settling the debt imbroglio.
The CBN and the NCC should be commended for their efforts in ensuring that a settlement point has been reached which will engender a seamless transition; the firm will remain stable and continue operations; thousands of jobs have been saved, and there is renewed prospect that the banks will get their monies eventually.
The impasse tested the country’s resolve to attract new investments while protecting businesses already in operation but are now challenged. At a time the country is improving the ease of doing business, it becomes more imperative to protect the investments already secured in the country.
The regulatory authorities did everything right in ensuring that the firm was not liquidated like others before it. The move is believed to be the desire to stave off the consequences to the economy and the country as the country is being deemed an unpopular investment destination.
There are lessons for all stakeholders from this crisis. Prior to this time, Etisalat had consistently and conscientiously met up with its payment obligations. It had, in fact, paid about 42 percent of its original loan taken from the consortium of banks. In an official statement signed by Ibrahim Dikko, Etisalat vice-president of corporate affairs, he stated that; “As at today, we can categorically state that the outstanding loan sum to the consortium stands at $227m and N113bn, a total of about $574m if the naira portion is converted to US Dollars”. With a devalued naira and dropping revenues, it is clear that Etisalat defaulted in its obligations to the banks. Thus, drivers of government policies should also take into account overall impact of such policies before implementation.
The resolution means jobs have been preserved. Etisalat Nigeria currently has about 2,000 workers, 115 Permanent Experience centers, 10 Temporary Experience centers, 90 Kiosks at Total filling stations all spread nationally.
In addition, thousands of Nigerians are connected with the company either as vendors, sub-contractors, ancillary support services and many indirect businesses have been built around the company’s service offerings. Nigeria’s economy would have taken a big hit had it not been for the seamless transition.
Clearly, there are other important lessons that will come to the fore by the time more things unravel. The seeming success of the Etisalat-Banks resolution may well become a case study for students of business management.
Williams writes from Lagos