Guaranty Trust Bank, Access Bank and Zenith Bank have plans to take over telco giant, Etisalat because of their inability to repay a loan of over N541bn it secured from the consortium in 2015. The loan was taken for Etisalat to turn around its network and expand its operations in Nigeria.
The banks reported Etisalat to the banking sector regulator, the Central Bank of Nigeria, CBN and to the Nigerian Communications Commission, NCC and although NCC tried to plead on their behalf, they couldn’t reach an agreement as a source from one of the banks said they could not afford a long-stretched re-payment plan in 2017 as the loan had been restructured twice since 2015. Also, the banks feared that inability to recover the loan could expose them to the Asset Management Company of Nigeria, AMCON, which had been demanding immediate cut-down on the rate of their non-performing loans.
Etisalat blamed its inability to fulfil its obligation to the banks on the current economic recession in Nigeria.
An NCC source disclosed that Etisalat blamed its inability to fulfil its obligation to the banks on the current economic recession in Nigeria. A senior bank official among those affected said Etisalat management was given option of filing for bankruptcy but it was not taken. This option, he said, would have required the banks just a management to oversee the telecoms firm’s operations.
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. “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.
