Nigeria’s fourth largest telecommunications operator, Etisalat, is in hot water. The carrier’s parent company, Etisalat UAE, which is based in Abu Dhabi has been ordered transfer 45% of its interest in its Nigerian subsidiary to a loan trustee after a debt-restructuring meeting failed to bear any fruits.
According to Reuters, Etisalat Nigeria has been negotiating with multiple Nigerian banks to restructure a $1.2 billion loan, a loan which the telco has failed to service. In the carrier’s defense, Nigeria has been hit by a financial crisis amid pressure on it by several foreign and local banks led by Access Bank to recover loan facilities that were extended to the firm in 2015.
Etisalat Nigeria had requested the loan to beef up its network, in addition to expanding its market share in the West African country.
The mobile operator’s failure to meet its loan repayment obligations that were agreed upon in 2016 forced banks to mount pressure on it. Nigeria’s ICT watchdog, Nigeria Communications Commission (NCC) failed to resolve the matter and this necessitated an intervention from the Central Bank of Nigeria. Because two heads are better than one, banks were requested be easy on the troubled carrier, giving every participating party an opportunity to renegotiate a repayment arrangement.
Turns out that the plan did hit another wall after Abu Dhabi Stock Exchange ascertained that Etisalat UAE had dropped its Nigerian unit that has lost a many customers. To sum it up, Etisalat UAE has written off the value of its stake to zero. Also, the company must transfer its stake by June 23 as owed banks are cracking their knuckles to take over the company.