More troubles for Etisalat Nigeria’s as largest shareholder pulls out

By Adedeji Fakorede

Investigation by National Daily revealed that Etisalat Nigeria Limited, Nigeria’s fourth largest telecommunication firm, appears to be swimming deeper in troubled waters as Mubadala Development Company of United Arab Emirates, the company’s largest shareholder, has pulled out its investment and headed out of the country.

Mubadala, an Abu Dhabi Government-owned investment and development company, controls about 70 per cent of the shares in Etisalat along with Etisalat UAE mobile, with Emerging Markets Telecommunications Services (EMTS, promoted by Hakeem Bello-Osagie, owning the remaining 30 per cent.

The UAE investor has hinted Etisalat Nigeria as well as the industry regulator, Nigerian communications Commission (NCC) of its decision to opt out of the joint ownership of the company investigation by National Daily further revealed.

“I can tell you that Mubadala’s withdrawal takes effect from Thursday,” one source said, asking not to be named because he was not authorised to speak on the matter.

With the withdrawal of its largest investor, the board of Etisalat Nigeria might be dissolved, with the creditor banks effectively taking control.

One of our sources said the ultimatum given the telecom company to pay up its debt expires today or tomorrow.

ALSO SEE: $1.2bn debt: GTB, others reject Etisalat’s 5% equity offer

To continue to run the company, the consortium of banks will most likely present a holding company with telecommunication operating experience to NCC for approval.

“The banks do not want the services of the company to cease,” one of our sources said. “So they are setting up a vehicle to keep whatever remains of Etisalat afloat. The banks may approach the NCC tomorrow or latest next week.”.

Etisalat has been facing huge financial crisis following pressures on it by a consortium of some foreign and Nigerian banks, led by Access Bank, to recover a $1.72 billion (about N541.8 billion) loan facility the company obtained in 2015.

The loan, which involved a foreign-backed guaranty bond, was for Etisalat to finance a major network rehabilitation and expansion of its operational base in Nigeria.

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Its inability to meet its debt servicing obligation agreed since 2016 compelled the consortium of banks, prodded by their foreign partners, to take up the matter with the Central Bank of Nigeria and the NCC.

The intervention of the two regulatory authorities persuaded the banks to suspend their decision to take over the mobile telephone company, giving it opportunity to renegotiate and reschedule the loan.

But Mubadala’s decision to pull out of the company is likely to push the troubled firm deeper into survival crisis.