A restructuring of the ownership of the Nigeria arm of the UAE telecoms company Etisalat Nigeria is set to change after talks with lenders failed with respect to $1.2bn (N541bn) loan.
Due to the inability of the telecoms company to meet up with the deadline to produce a structural agreement, Access Bank PLC and Guaranty Trust Bank PLC with 11 other banks are set to be part of the restricting happening at the ownership level.
Etisalat Nigeria had in a statement on Tuesday said it had commenced restructuring with changes to its shareholding.
However, the statement signed by the Vice-President, Regulatory and Corporate Affairs, Etisalat Nigeria, Ibrahim Dikko, didn’t give details as to the shareholding formula or whether the company will be renamed.
“Etisalat Nigeria can confirm discussions are ongoing regarding other issues such as the trading name during this transition phase. Operations and services to our subscribers remain normal and will in no way be affected as we continue to deliver quality services to our subscribers.
“We will continue to tap into the rich, creative and innovative resources within our workforce to build a stronger business upon the stable foundation we have laid in our nine years of operation.”
The Etisalat Group in a letter to the Abu Dhabi Securities Exchange in Abu Dhabi, United Arab Emirates explained the changes made to the Etisalat Nigeria.
As reported by Reuters, The Etisalat Group, with a 45 percent stake in the Nigerian arm, said it had been ordered to transfer its shares to a loan trustee by June 23, after negotiations failed.
Etisalat Group has until Friday to fully transfer 100 percent of the company’s shares in the Nigeria arm to the legal representative of the 13 banks, the United Capital Trustees Limited.
Dikko state that the management still runs the company after the shareholding changes because there were contractual and regulatory issues to be resolved.
“Etisalat Nigeria wishes to express its profound gratitude to the government, the Nigerian Communications Commission and the Central Bank of Nigeria for their patriotic zeal and tireless efforts at ensuring collaborative and productive engagement,”
Director, Public Affairs, NCC, Tony Ojobo, read in part, “In view of the recent development, the NCC wishes to reassure all stakeholders in the telecommunications sector, in particular, the subscribers on the Etisalat network, that the commission will ensure that the integrity of the Etisalat network is not compromised.
“Accordingly, the commission has drawn the attention of the banks to the provisions of the Nigerian Communications Act, 2003, Section 38:
“Subsection 1 – The grant of a license shall be personal to the licensee and the license shall not be operated by, assigned, sublicensed or transferred to another party unless the prior written approval of the commission has been granted;
“Subsection 2 – A licensee shall at all times comply with the terms and condition of the license and the provision of this Act and its subsidiary legislation.”
The President, Association of Telecommunications Companies of Nigeria, Olushola Teniola, asked the NCC to focus on consumers, saying, “Their ultimate choice should be paramount in the minds of all stakeholders during this difficult period for the shareholders of Etisalat.”
Teniola said that the customers and quality of service were key to the future shape and size of Etisalat.
He said, “Investors, both domestic and international, will be watching very closely how our regulator is able to manage any fallout and the precedence this sets for the industry.
“The ATCON has called for and reiterates a call for a competition czar to be created to deal with such issues raised over the last three months concerning takeovers, mergers, and acquisitions in a sector that is critical to the future of our economy.”