- creditors issue final default notice
By odunewu Segun
With the expiration of a final one month window for repayment of the $1.2bn credit to Etisalat Nigeria by 13 commercial lenders on May 31st 2017, fate of Nigeria’s fourth largest telecommunication network hangs in the balance.
According to findings by National Daily, the 14 banks led by Guaranty Trust Bank has issued a final default notice following the expiration of the window after all previous negations hit the rock. One of the options before the banks is to approach the court and get the board dissolved and take the company into receivership.
But the challenge however is that the banks can’t run the firm because they don’t have operating license neither do they have the technical knowhow to do so.
Another option being closely guarded by the banks is Etisalat Nigeria to request for a bankruptcy status. In the agreement, the bankruptcy option would require having receivership management appointed by the banks to oversee its operations.
The other option, National Daily gathered is for Etisalat to go into a merger with the existing telcos operating in the country. Already MTN had in the past signified interest to buy Etisalat but had to back pedal following its trouble with the NCC over unregistered Sims. However, reliable sources say Globalcom may also be interested in Etisalat buyout but the telecom giant is said to be keeping its plan under wraps.
In a statement by brahim Dikko, Vice President, Regulatory & Corporate Affairs, Etisalat Nigeria, said negotiations with the consortium of banks regarding the syndicated loan agreement in 2013 have reached an advance stage.
In the statement which reads in part, Dikko said: “Whilst it is premature at this stage of the ongoing discussion to affirm that this is the conclusive option, Etisalat Nigeria considers it pertinent to state that parties in the negotiation are considering a number of options and discussions are at an advanced stage regarding the syndicated loan agreement with the banks. It will therefore be presumptive and in bad faith to begin to predict the outcome.”
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Etisalat Nigeria had in 2013 obtained a seven-year loan facility of $1.2billion from 13 local banks and their foreign counterparts to refinance a $650 million loan as well as the expansion of its network but the company had missed the payment due to dollar shortfall in Nigeria’s financial system.
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.
The 13 local banks involved in the loan deal include: Zenith Bank, GT Bank, First Bank, UBA, Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank, and Union Bank.