Smile Communications Nigeria Limited is embroiled in claims and counters over the $125 million loan it obtained from Afrexim Bank, and routed the loan through a local bank, Diamond Bank.
A newspaper report claimed that the broadband company defaulted in the repayment of the facility obtained to help fund the company’s infrastructure expansion plans.
The newspaper citing sources reported that the loan was structured so that it could be disbursed in tranches based on the attainment of critical milestones, including certain increases in active subscriber numbers.
While some tranches have so far been released, Diamond Bank is wary of releasing the last tranche of the $125 million loan to Smile Communications, given its poor default on the loan repayment terms.
The bank is now faced with the dilemma that withholding the balance of the loan could jeopardise Smile’s operations, while on the other hand, disbursing the entire loan could increase its exposure to the telecoms firm.
The Smile Communications however claimed that it has never defaulted on any of its loan obligations adding that the story was an attempt to derail the ongoing investigative hearing on the 9mobile acquisition bid process currently ongoing at the House.