Mobile telecoms operator, Etisalat Nigeria, got reprieve on Friday following a breakthrough in its negotiations with three Nigerian banks that threatened to take over the business over a $1.72 billion (about N541.8 billion) loan.
At the end of the talks on Friday held at the Central Bank of Nigeria, CBN office in Lagos, at the instance of the Nigerian Communications Commission, NCC, the creditor consortium of banks were prevailed upon to reconsider their demands and halt their attempt to take over Etisalat.
Spokesperson of the NCC, Tony Ojobo, described the meeting as “very productive and constructive”, saying Friday’s meeting succeeded in halting the attempt by Etisalat’s creditors at bringing it under any form of takeover and develop a restructured repayment plan.
“Receivership was completely taken off the table in a meeting that was very productive and constructive,” Mr. Ojobo said in a statement.
He said during the meeting, the banks and the mobile network operator agreed actions that would bring all parties closest to a resolution.
“The CBN and NCC were able to secure for Etisalat the necessary oxygen to enable it continue to meet urgent operational expenses,” Mr. Ojobo said.
The NCC spokesperson said the CBN Governor, Godwin Emefiele, who presided over the meeting, was firm in his declaration about what needed to be done by both parties towards a quick resolution of the crisis.
Although Mr. Emefiele did not give details on those things that need to be done to resolve the crisis, the NCC equally made it clear that parties involved must ensure they did everything necessary to protect the 23 million Etisalat subscribers and the telecoms industry, to prevent scaring away potential investors.
Mr. Ojobo said to ensure that Etisalat remained in business, while the consortium of banks continued to meet their obligations to their customers, another meeting was scheduled for March 16 to agree on a payment restructuring path on the repayment of the loan going forward.
Besides, he said the NCC would also lead the CBN in a crucial meeting with Etisalat’s shareholders anytime soon to continue to explore ways to resolve the crisis
Following a meeting in Abuja on Thursday between the Executive Vice Chairman of NCC, Umar Danbatta and the Mr. Emefiele, it was resolved that another meeting be convened to deliberate on how best to stave off the attempt by the banks to take over Etisalat.
The meeting had also agreed to invite Etisalat management and the affected banks to a crucial meeting on Friday, to find an amicable resolution of the crisis.
The consortium of some foreign and Nigerian banks, including Guaranty Trust Bank, Access Bank and Zenith Bank, had threatened to take over Etisalat after it defaulted in its debt servicing obligation agreed since 2016.
The loan, obtained in 2015, involved a foreign-backed guaranteed bond for Etisalat to use in financing a major network rehabilitation and expansion of its operational base in Nigeria.
But, the company’s continued failure to meet the repayment schedule angered the banks into threatening to take over the company.
Etisalat had blamed its inability to fulfill its obligations to the banks on the current economic recession in Nigeria.
Although the NCC had intervened, pleading with the banks to reconsider their attempt to take over the mobile telecom firm, it became necessary to involve the CBN to prevail on the banks to come up with restructured repayment schedule for the loan in the alternative.