Debt
crisis rocking the Middle-east multinational telecom company, Etisalat
might be forcing it out of Nigeria with the new development.
Abu Dhabi telecoms group, Etisalat, may sell its stake in Etisalat
Nigeria, which has defaulted on a $1.2bn loan, but wants the company’s
debt restructured before it does so, Reuters quoted two sources as
informing it on Monday.
The Central Bank of Nigeria and the Nigerian Communications
Commission on Friday agreed with local banks 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.
Etisalat is due to meet with creditors on Tuesday (today) or Wednesday to discuss the default, the sources said.
It was not clear whether Etisalat, which has a 45 per cent holding
in the Nigerian unit after converting a loan to equity in February,
would divest completely.
The Senior Vice-President of Etisalat, Ahmed Bin Ali, according to
Reuters, declined to comment, while Etisalat Nigeria could not be
reached.
“It is at an early stage,” one source said of the sale.
Last week a banking source told Reuters that the Nigerian affiliate
of Etisalat had given notice to its lenders that it would miss a
payment in February, but the two sides have yet to agree terms.
Etisalat Nigeria signed a $1.2bn medium-term facility with 13
indigenous banks in 2013, which it used to refinance an existing $650m
loan and modernise its network.
But an economic downturn, a currency devaluation and dollar
shortages on Nigeria’s interbank market led to it missing payment, the
Vice-President for regulatory affairs at Etisalat Nigeria, Ibrahim
Dikko, said.
Banks involved in the loan include Zenith Bank, GTBank, First Bank,
UBA, Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank and
Union Bank.
Abu Dhabi state investment fund, Mubadala, which has a 40 per cent
stake in Etisalat Nigeria, wants a solution found, another source said.
Mubadala declined to comment.
Etisalat has been hit hardest among foreign firms by dollar
shortages in Nigeria. Firms that invested in the country in the era of
high oil prices are struggling to repay loans or keep operating as the
oil producer suffers from a slump in oil revenues, hitting its currency
and dollar reserves.
Etisalat’s Chief Strategy Officer, Khalifa Hassan al-Forah
al-Shamsi, told Reuters that it was making sure that in markets where
there were currency fluctuations, operating costs were in local
currencies. Though he was not responsible for Nigeria.
Etisalat Nigeria has 20 million subscribers, according to Nigeria’s
telecom regulator, making it the country’s number four mobile operator
with a 14 per cent market share. South Africa’s MTN has 47 per cent;
Globacom, 20 per cent; and Airtel, a subsidiary of India’s Bharti
Airtel, 19 per cent.
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