$1.2bn debt:  Etisalat to meet with creditors in London

By Odunewu Segun

Following the seeming collapse of talks between Etisalat Nigeria and a consortium of banks -Guaranty Trust Bank Plc (GTBank), Access Bank Plc and Zenith Bank Plc in March, the Nigerian arm of Abu Dhabi telecom group Etisalat is meeting lenders in London on Friday for talks on restructuring a $1.2 billion debt, Access Bank CEO said.

Access Bank is one of the lenders in the consortium. Access CEO Herbert Wigwe said the meeting was continuing and he expected to get the results of the discussions next week.

The Nigerian Communication Commission (NCC) agreed with local banks in March to pursue a default deal rather than a receivership for Etisalat Nigeria so as not to deter investors and to avoid a wider debt crisis.

The consortium of banks have been having a running battle with the mobile telephone operator over a loan facility totaling $1.2 billion Etisalat obtained in 2013. Etisalat Nigeria had signed a $1.2 billion medium-term facility with 13 Nigerian banks in 2013, which it used to refinance an existing $650 million loan and fund a modernisation of its network.

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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.

However, following the failure of the company to meet its debt servicing schedule agreed since 2016, the three Nigerian banks, prodded by their foreign partners, reported Etisalat to banking sector regulator, the Central Bank of Nigeria (CBN) and the NCC.

Although Etisalat blamed its inability to fulfil its obligation to the banks on the current economic recession in Nigeria as well as the depreciation of the naira, the banks said their attempt to recover the loan by all means was fuelled by the need to cut down on the rate of their non-performing loans.