Zenith Bank, Access Bank, Others Take Over Etisalat Nigeria

One of Nigeria’s telecommunication companies, Etisalat has now been
taken over by ten major Nigerian lenders.
The lenders include, Zenith Bank, GT Bank, First Bank, UBA, Fidelity Bank,
Access Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank.
The take-over came as a result of a futile effort by Emerging Markets Telecommunications Services,
EMTS, promoted by-one time Chairman, United Bank for Africa, UBA, Hakeem Bello-Osagie,
to reach agreement with the banks on debt restructuring plan in the protracted $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.
A letter dated June 2017, with No. 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.

It added, “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 extened the deadline for the share transfer to 5.00 pm Lagos
time on 23 June 2017,” the filing said.
The Telecommunication company has been under pressure since 2016, 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 for the mobile telephone operator
to finance a major network rehabilitation and expansion of its operational base in Nigeria.
Unable to meet its debt servicing obligations agreed since 2016, the consortium,
prodded by their foreign partners, threatened to take over the company and its assets across the country.
But, the intervention of the telecom sector regulator, Nigerian Communications Commission,
NCC, and its financial sector counterpart, the Central Bank of Nigeria, CBN, succeeded
in persuading the banks to rethink their threat and give Etisalat a chance to renegotiate the loan’s repayment schedule.

 

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