A consortium
of banks, led by Access Bank PLC and other Nigerian and foreign banks, has
taken over the management of Etisalat Nigeria, effective June 15.
The takeover
followed the collapse of the effort by Emerging Markets Telecommunications
Services, EMTS, promoted by one-time Chairman, United Bank for Africa, UBA,
Hakeem Bello-Osagie, to reach an agreement with the banks on debt restructuring
plan in the protracted $1.72 billion (about N541.8 billion) debt impasse.
However,
EMTS Holding BV, established in the Netherlands, has up to June 23 to complete
the transfer of 100 percent of the company’s shares in Etisalat to the United
Capital Trustees Limited, the legal representative of the consortium of banks.
Etisalat
Group, the parent company of Etisalat Nigeria, announced the takeover on
Tuesday in a filing to the Abu Dhabi Securities Exchange in Abu Dhabi, United
Arab Emirate.
The filing,
with reference number Ho/GCFO/152/85, and dated June 20, 2017, signed by
Etisalat Group Chief Financial Officer, Serkan Okandan, said efforts by EMTS to
restructure the repayment of the syndicated loan by a consortium of banks to
Etisalat Nigeria collapsed.
“Further to
our announcement dated 12 February, 2017, Emirates Telecommunications Group
Company PJSC, “Etisalat Group” would like to inform you that Emerging Markets
Telecommunications Services Limited “EMTS” (“the company), established in
Nigeria and an associate of Etisalat Group with effective ownership of 45% and
25% ordinary and preference shares respectively, defaulted on a facility
agreement with a syndicate of Nigerian banks (“EMTS Lenders”).
“Subsequently,
discussions between EMTS and the EMTS Lenders did not produce an agreement on a
debt restructuring plan.
“Accordingly,
the Company received a default and security Enforcement Notice on June 9 ,
2017, requesting EMTS Holding BV (EMTS BV) established in the Netherlands, and
through which Etisalat Group holds its interest in the company) requiring EMTS
BV to transfer 100% of its shares in the company to the United Capital Trustees
Limited (the Security Trustee”) of the EMTS Lenders by June 15, 2017.
“Subsequently
the EMTS Lenders extended the deadline for the share transfer to 5.00 pm Lagos
time on June 23, 2017,” the filing said.
Etisalat has
been under pressure since 2016, following the demand notice for the recovery of
a $1.72 billion (about N541.8 billion) loan facility it obtained from a
consortium of banks in 2015.
The loan,
which involved a foreign-backed guaranty bond, was for the mobile telephone
operator to finance a major network rehabilitation and expansion of its
operational base in Nigeria.
Unable to
meet its debt servicing obligations agreed since 2016, the consortium, prodded
by their foreign partners, threatened to take over the company and its assets
across the country.
But the
intervention of the telecom sector regulator, Nigerian Communications
Commission, NCC, and its financial sector counterpart, the Central Bank of
Nigeria, CBN, persuaded the banks to rethink their threat and give Etisalat a
chance to renegotiate the loan’s repayment schedule.
Late last
week, PREMIUM TIMES reported exclusively that Etisalat was sinking deeper into
trouble, with Mubadala, its majority shareholder, representing Etisalat of UAE,
on the verge of pulling out following irreconcilable differences concerning the
loan issue.
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