Nigerian banks and their foreign affiliates, yesterday, took over Etisalat Nigeria for allegedly failing to repay a loan of over N541bn it secured from the consortium in 2015.
The Nigerian banks include Zenith Bank , GT Bank, First Bank, UBA , Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank.. The new development is coming after the telecom regulator, the Nigerian Communications Commission, NCC, tried a couple of times to mediate issues between the telecoms company and the banks without results.
The loan facility totalling $1.72 billion (about N541.8 billion) involving a foreign-backed guaranty bond, was for Etisalat to turn around its network and expand its operations in Nigeria. The banks claimed that Etisalat had failed to service the debt as agreed since 2016.
They subsequently reported Etisalat to the banking sector regulator, the Central Bank of Nigeria, CBN, and its communications sector counterpart, the NCC. Etisalat blamed its inability to fulfil its obligation to the banks on the current economic recession in Nigeria. Reports are that the company is in talks with the local banks to renegotiate terms of the $1.2 billion loan after missed payments.
Ibrahim Dikko, Vice President for Regulatory Affairs at Etisalat Nigeria, said Etisalat missed payments due to an economic downturn in Nigeria, currency devaluation and dollar shortages on the country’s interbank market and denied the takeover. “We are in discussions with our bankers and have been for quite a while. They have not taken over the business and we are hoping that we can resolve the issue and find a way to renegotiate terms,” Dikko said.
