The management of Etisalat Nigeria has been taken over by a consortium of banks both in Nigeria and foreign, led by Access Bank PLC and has was effective from June 15.
The takeover of the Telecommunication company came due to the collapse of the effort by Emerging Markets Telecommunications Services, EMTS, promoted by-one-time Chairman, United Bank for Africa, UBA, Hakeem Bello-Osagie, to reach an agreement with the banks on debt restructuring plan in the protracted $1.72 billion (about N541.8 billion) debt impasse.
the Netherlands founded EMTS Holding BV, has up to June 23 to complete the transfer of 100 percent of the company’s shares in Etisalat to United Capital Trustees Limited, the legal representative of the consortium of banks.
The takeover was announced on Tuesday in Abu Dhabi, when Etisalat Group, the parent company of Etisalat Nigeria made it known in a filing with the Abu Dhabi Securities Exchange in Abu Dhabi, United Arab Emirate.
The filing, with reference number Ho/GCFO/152/85, dated June 20, 2017, was signed by Etisalat Group Chief Financial Officer, Serkan Okandan, said efforts by EMTS to restructure the repayment of the syndicated loan by a consortium of banks to Etisalat Nigeria collapsed.
“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 extended the deadline for the share transfer to 5.00 pm Lagos time on 23 June 2017,” the filing said.
Etisalat 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 meant for the telecommunication operator to rehabilitate and expand its operational base in Nigeria.
Without the ability to meet its debt servicing duties as agreed sin 2016, the consortium driven by their foreign partners threatened to take over the Telecommunication company and its asset nationwide.
Nigeria’s telecom sector regulatory agency, Nigerian Communication Commission, NCC, and its financial counterpart Central Bank of Nigeria, CBN, convinced the banks to give Etisalat a chance to renegotiate the loan repayment structure.