A consortium of of local and foreign banks, led by Access Bank Plc, have taken over the management of telecommunication company, Etisalat Nigeria, effective June 15.
The take-over followed a futile effort by Emerging Markets Telecommunications Services (EMTS), promoted by one time Chairman of United Bank for Africa, UBA, Hakeem Bello-Osagie, to reach an agreement with the banks on a debt restructuring plan in the prolonged $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 letter filed to the Abu Dhabi Securities Exchange in Abu Dhabi, United Arab Emirate.
The filing dated June 2017, with reference number Ho/GCFO/152/85 signed by Etisalat Group Chief Financial Officer, Serkan Okandan, noted that efforts by EMTS to restructure the repayment of the syndicated loan by a consortium of banks to Etisalat Nigeria collapsed.
The filing said: “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 9 June 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 15 June 2017.
“Subsequently the EMTS Lenders extend the deadline for the share transfer to 5.00 pm Lagos time on 23 June 2017.”
Since 2016, the telecommunication company has been under pressure 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 used to finance major network rehabilitation and expansion of their operational base in Nigeria.
The consortium, prodded by their foreign partners, threatened to take over the company and its assets across the country since they were unable to meet their debt servicing obligations agreed in 2016.
With the intervention of Nigerian Communications Commission (NCC) and the Central Bank of Nigeria, CBN, the banks were persuaded to rethink their threat and give Etisalat a chance to renegotiate the loan’s repayment schedule.