National Wire About Nigerians, Nigerian Business and Other Stories
Fidelity Bank hasexposure of around N17.5 billion naira ($56 million) to Etisalat Nigeria, theNigerian lender’s investor relations team said on Thursday.
The Nigerian arm of Abu Dhabi-listed telecomscompany Etisalat is in talks with local banks to renegotiate the terms of a$1.2 billion loan it took out four years ago after missing a payment.
It would be recalled that it was in the news lastweek that a consortium of foreign and Nigerian banks on Wednesday took overEtisalat Nigeria as the telecommunications company failed to pay a loantotalling $1.72 billion (about N541.8 billion) it was granted in 2015.
The Nigerian banks are Guaranty Trust Bank, AccessBank and Zenith Bank were named as the creditor to the troubledtelecommunications company.
The action of taking over the company was said tobecome imperative since the Nigerian Communications Commission (NCC) was notable to broker a peaceful resolution between Etisalat Nigeria and the banks.
According to sources close to the banks, the loaninvolved a foreign-backed guaranty bond and was given to Etisalat to finance amajor network rehabilitation and expansion of its operational base in Nigeria.
After failing to service its debt since 2016, thebanks reported the company to the Central Bank of Nigeria and the NCC.
The source explained that Etisalat management wasgiven the option of filing for bankruptcy but the telecoms firm refused to takethe advice. This option would have required the banks just a management tooversee the telecoms firm’s operations.
According to the source, “While all these werehappening, the banks concerned had thought that the NCC would have used itspowers as a regulator to bail the telecom out, or advise the companyaccordingly, but it became obvious that the NCC wasn’t so interested. It wasmerely buying time for Etisalat.”
Nevertheless, workers at Etisalat blamed theinability of the company to fulfil its financial obligation to the banks on thecurrent economic recession in Nigeria.
According to a source close to one of the bankssaid: “While the management continued to blame the challenge on the economicrecession, the banks replied that the Asset Management Company of Nigeria(AMCON) regulations demanding immediate cut down on the rate of theirnon-performing loans give them no other option. We saw this coming and that iswhy most of our colleagues, in the last six months, kept resigning.”
NCC was said to have approved the take-over onTuesday, March 7, when all the parties could not reach an agreement.
