Etisalat has announced it is severing ties with its Nigerian arm by terminating its management agreement. This means that the brand will be phased out of Nigeria, Hatem Dowidar, the chief executive of Etisalat International told Reuters on Monday.
Dowidar said all UAE shareholders of Etisalat Nigeria have exited the company and have left the board and management. According to him, discussions were ongoing with Etisalat Nigeria to provide technical support, adding that it can use the brand for another three-weeks before phasing it out
“There’s a new board and we are not part of that company. We have sent our termination letter for the management agreement,” he told Reuters.
Dowidar revealed that parent Etisalat had written down the value of the Nigerian business on its books and that transferring its 45 percent stake to the lenders after loan renegotiation talks collapsed had no impact on the group.
When asked whether Etisalat would consider returning to Nigeria, Dowidar said: “The train has left the station on that one. Being in that market as an investor … are we willing to risk more money compared to the reward for the long-term?”
The CEO said Etisalat had been unsuccessful at converting some of its dollar debt to local Nigerian currency. He also said the group might exit or merge with a local rival in markets where it was not one of the top two players. He did not specify which markets.
Etisalat is among the top two in markets such as the UAE, Saudi Arabia, Morocco, Egypt and Afghanistan, he said.
“(Nigerian) lenders may try to continue to operate the company until they find a buyer (or) they may merge the company with the existing players in Nigeria, he said, adding that it was tough to say what lenders would do.
“The brand agreement in either of these two scenarios won’t be a long-term thing, so we take out the brand; in the long term Etisalat won’t be in Nigeria.”
Nigerians have messed up with this one.
I am disappointed.