Monday, March 13, 2017

Etisalat Saved by CBN and NCC over N541.8bn Loan:

Etisalat, Nigeria’s most innovative and customer friendly telecommunications company, would have been taken over by Guaranty Trust Bank, Access Bank and Zenith Bank, and a consortium of foreign banks last week, over unpaid loan, according to reports.
The telco got a loan totalling US$1.72 billion (about N541.8 billion) from the banks in 2015 for a major network rehabilitation and expansion of its operational base in Nigeria.
While the loan has been used for its purpose, the company failed to service it last year as agreed. This didn’t go down well with the banks, who reported the matter to the Central Bank of Nigeria (CBN) and the Nigerian Communication Commission (NCC).
The banks have been trying to get Etisalat to fulfill its obligation but all to no avail. The Asset Management Company of Nigeria, AMCON, has also been on their neck over the non-performing loans.
Since is doesn’t look like Etisalat will do the needful anytime soon, the banks had decided to take over the company and oversee its operations, according to the report .
Nigerian Communications Commission (NCC) and Central Bank of Nigeria (CBN) during the Friday meeting last week have got reprieve for Etisalat on the loan default crisis facing the company. CBN and NCC were able to secure for Etisalat, the necessary “oxygen” to enable it continue to meet urgent operational expenses.
Tony Ojobo , the Director of Public Affairs of NCC said that CBN Governor, Godwin Emefiele who chaired the meeting, was firm in declaring what needed to be done by both parties towards a quick resolution.
He said that NCC equally made it clear that everything necessary must be done to protect Etisalat subscribers.
The director said that there was also need for protection of the telecom industry to prevent potential investors from developing cold feet.
According to him, effort has been made to ensure that Etisalat remains in business while the consortium of banks meet their obligations to their customers.
“A meeting will hold on March 16 to agree on a payment restructuring path going forward. The NCC will lead the CBN in a possible crucial meeting with Etisalat’s shareholders anytime soon,” he said.
On March 8, there was an attempt by a consortium of banks to take over Etisalat, because of its N541.8 billion debt.
A consortium of some foreign and Nigerian banks, including Guaranty Trust Bank, Access Bank and Zenith Bank , have been having a running battle with the mobile telephone operator over a loan facility totalling $1.72 billion (about N541.8 billion) obtained in 2015.
The banks said their attempt to recover the loan by all means, was fuelled by the pressure from the Asset Management Company of Nigeria (AMCON) , demanding immediate cut down on the rate of their non-performing loans.
NCC appears not to be favourably disposed to the takeover proposal; as it believed that Etisalat is not only a viable going concern, but also willing and able to negotiate the servicing of its loans.
Etisalat is Nigeria’s fourth largest telecommunications operator with about 21 million subscribers as at January 2017.
It commenced business in Nigeria in 2009.
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