{"id":14616,"date":"2017-06-22T15:45:10","date_gmt":"2017-06-22T14:45:10","guid":{"rendered":"https:\/\/nationalwire.com.ng\/?p=14616"},"modified":"2017-06-22T15:45:10","modified_gmt":"2017-06-22T14:45:10","slug":"cbn-aligns-with-ncc-to-resist-hostile-takeover-of-etisalat","status":"publish","type":"post","link":"https:\/\/nationalwire.com.ng\/sub\/cbn-aligns-with-ncc-to-resist-hostile-takeover-of-etisalat\/","title":{"rendered":"CBN Aligns with NCC, to Resist \u2018Hostile\u2019 Takeover of Etisalat"},"content":{"rendered":"<p>Just like the Nigerian Communications Commission (NCC), the leadership of the Central Bank of Nigeria (CBN) has informed the 13 banks that extended a $1.2 billion facility to Etisalat Nigeria that it would resist the move by the lenders to take over the network operator without its express approval.<\/p>\n<p>This was the fallout of a meeting held between CBN officials and the CEOs of the 13 banks Wednesday in Abuja.<\/p>\n<p>Citing the Nigerian Communications Act (NCA), the NCC on Tuesday had stepped into the crisis that has enveloped the country\u2019s fourth largest network operator, reminding the banks that they could not take over Etisalat\u2019s operating licence without its approval.<\/p>\n<p>Aligning with the NCC, a reliable central bank source, who spoke to THISDAY Wednesday, said the Board of the CBN would not support any \u201chostile takeover\u201d of the telecoms company due to its indebtedness to the banks.<\/p>\n<p>According to the source, the attempt by the banks to take over Etisalat clearly jeorpardises the federal government\u2019s effort to attract Foreign Direct Investments (FDI) into Nigeria\u2019s ailing economy.<\/p>\n<p>She said the CBN, NCC and the banks would resolve the matter amicably.<\/p>\n<p>\u201cJust like the NCC has warned that Etisalat\u2019s licence is not transferable, the leadership of the CBN from all indications will not allow any hostile takeover without its approval.<\/p>\n<p>\u201cThey (the banks) cannot do that by just taking a decision like that. Etisalat is not transferring any licence to any consortium of banks. We are going to resolve it amicably. The CBN and NCC are working towards resolving it amicably,\u201d the CBN source said.<\/p>\n<p>A consortium of 13 Nigerian lenders led by Access Bank Plc moved to make good an earlier threat to take over Etisalat by Thursday, following its inability to meet the payment terms on a $1.2 billion loan that it took in 2013 for network upgrade and expansion.<\/p>\n<p>The banks comprising Access Bank, Zenith Bank Plc, Guaranty Trust Bank Plc, FirstBank Limited, Fidelity Bank Plc, First City Monument Bank (FCMB), Stanbic IBTC, EcoBank, United Bank for Africa (UBA) Plc and Union Bank of Nigeria Plc, among others, had said they would take over Etisalat\u2019s operations through its legal representative, United Capital Trustees.<\/p>\n<p>However, THISDAY learnt that during their meeting with the CBN Wednesday, the banks made a presentation on the issues pertaining to the delinquent facility.<\/p>\n<p>According to the CBN source, who was present at the meeting, the banks were reported to have informed the central bank that they have no intention of taking over Etisalat Nigeria, as had been widely reported.<br \/>\nThey, however, expressed concern that Emirates Telecommunications Group Company (Etisalat Group), Abu Dhabi, which holds a 45 per cent stake in the Nigerian subsidiary, had announced on Tuesday at the Abu Dhabi Stock Exchange of its intention to pull out from its Nigerian operations without meeting its obligations.<\/p>\n<p>The CBN source said the bank CEOs informed the central bank that this action amounted to abandoning the company\u2019s monumental obligations in Nigeria which include:<\/p>\n<ul>\n<li>$1.2 billion syndicated and bilateral loans approved by 13 Nigerian banks, now delinquent;<\/li>\n<li>Taxes and levies due to the Federal Government of Nigeria and regulatory agencies; and<\/li>\n<li>Other third party creditors (i.e. vendors, service providers and contractors);<\/li>\n<\/ul>\n<p>The above, the CEOs argued, was tantamount to ignoring and disregarding Etisalat\u2019s commercial contracts in Nigeria.<br \/>\nThe consortium of banks also told the CBN that they had not been involved in the ownership of Etisalat Nigeria and therefore in no position to transfer or retain any percentage of the company\u2019s shares.<br \/>\nThe banks were also unhappy that the facilities approved by them for Etisalat fell due for payment, but the company had serially defaulted on repayment, said the source.<\/p>\n<p>\u201cPart of the facilities have become delinquent while the sponsors and management of Etisalat Nigeria were not forthcoming with the various restructuring options proposed by the lenders.<br \/>\n\u201cThey also made it clear that they have no intention of taking over ownership of Etisalat Nigeria,\u201d said the CBN source.<\/p>\n<p>In their presentation, the 13 lenders also informed the CBN that while other network operators sold their towers and utilised the entire sales proceeds to repay their loans, Etisalat Nigeria in 2014 sold its towers but did not apply the sales proceeds to repay its loan.<\/p>\n<p>Banks Want Probe<\/p><div data-ad-id=\"32665\" style=\"text-align:center; margin-top:0px; margin-bottom:0px; margin-left:0px; margin-right:0px;float:none;\" class=\"afw afw_ad_image afw_ad afwadid-32665  \">\r\n                                                            <div style=\"font-size:10px;text-align:center;color:#cccccc;\">Advertisement<\/div>\r\n\t\t\t\t\t\t\t<a target=\"_blank\" href=\"http:\/\/www.accessbankplc.com\" rel=\"nofollow\"><img decoding=\"async\" height=\"auto\" max-width=\"100%\" src=\"https:\/\/nationalwire.com.ng\/wp-content\/uploads\/2019\/06\/Banner-1.jpg\"><\/a>\r\n                                                                        \r\n\t\t\t\t\t\t\t<\/div>\n<p>Also, it emerged Wednesday that the 13 banks are seeking the federal government\u2019s intervention to investigate the management of Etisalat Nigeria over the utilisation of the $1.2 billion facility.<\/p>\n<p>A management source close to the banks in Lagos said the lenders want the government, through the Economic and Financial Crimes Commission (EFCC), to wade into the matter, by investigating what the company did with the loan.<br \/>\nAccording to the News Agency of Nigeria (NAN), the source alleged that the loans were siphoned and needed to be investigated by the EFCC, noting that there was no evidence as to what the company did with the loan.<\/p>\n<p>He said the affected banks had rolled out a lot of viable options to Etisalat for the loan to be restructured, but they were rejected by the company.<\/p>\n<p>The source said that the banks were not network operators and had no intention of running Etisalat.<br \/>\n\u201cAll we want is to recover the loans; we cannot write off the loans as demanded by Etisalat, because the company is viable,\u201d the source stated.<\/p>\n<p>The source said that the telecoms company wanted the banks to write off the loan as non-performing, which was rejected because the company was doing well.<\/p>\n<p>According to the source, the company also wants injection of new capital, and this had been suggested to the majority shareholder.<br \/>\nThe source said the government should investigate the matter with all seriousness, to dig out the truth.<\/p>\n<p>Etisalat Disputes Banks\u2019 Claims<\/p>\n<p>However, sources in Etisalat Wednesday disputed claims by the banks that the company had not made attempt to repay the facility, saying that the network operator has paid over 40 per cent of the actual loan of $1.2 billion.<br \/>\nOne top official of Etisalat informed THISDAY Wednesday that the company had paid as much as $500 million (N165 billion) since it commenced installmental payments on the loan in 2014.<\/p>\n<p>\u201cThe actual outstanding on the Etisalat loan is about $500 million (N165 billion). This is in view of the fact that Etisalat has efficiently serviced the $1.2 billion loan up until early this year when discussions with the banks regarding the repayment restructuring commenced.<\/p>\n<p>\u201cI can confirm to you in confidence that the company has made payments of over 40 per cent of the original loan so far,\u201d the official said.<\/p>\n<p>During a visit to Etisalat\u2019s corporate head office at Banana Island and its annex office at the Oriental Hotel, Victoria Island, both in Lagos, THISDAY observed that workers went about their duties unhindered.<br \/>\nAnother senior manager of the telecoms company, who spoke on the condition of anonymity, told THISDAY that the announcement by the Etisalat Group in Abu Dhabi to pull out of its Nigerian subsidiary was not a sign of bankruptcy or insolvency.<\/p>\n<p>According to him, \u201cWhat has effectively happened is a change in ownership and not a receivership, bankruptcy or winding up. So operations will continue to run and subscribers can continue to access services on the network as usual.\u201d<\/p>\n<p>He also allayed fears of job losses, stating that there was no plan to lay off any staff of the company.<br \/>\nHe explained that \u201cthe discussions with the banks have been on-going for a while and Etisalat has met its obligations to staff during this time. So long as the business continues, and from all indication it will, the company will sustain its side of the bargain\u201d.<\/p>\n<p>He was also confident that the company\u2019s day-to-day operations would not be disrupted in any way and that subscribers would continue to enjoy \u201cexcellent customer experience\u201d on its network during and after the transition period.<br \/>\nAs of press time, the NCC was meeting on Etisalat\u2019s unresolved issues with the banks.<\/p>\n<p>Thisday<\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>Just like the Nigerian Communications Commission (NCC), the leadership of the Central Bank of Nigeria (CBN) has informed the 13 banks that extended a $1.2 billion facility to Etisalat Nigeria that it would resist the move by the lenders to take over the network operator without its express approval. This was the fallout of a &hellip;<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":11,"featured_media":14555,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[17],"tags":[1628],"coauthors":[2392,2393],"class_list":["post-14616","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-news","tag-etisalat"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v18.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>CBN Aligns with NCC, to Resist \u2018Hostile\u2019 Takeover of Etisalat - National Wire<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nationalwire.com.ng\/sub\/cbn-aligns-with-ncc-to-resist-hostile-takeover-of-etisalat\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CBN Aligns with NCC, to Resist \u2018Hostile\u2019 Takeover of Etisalat - National Wire\" \/>\n<meta property=\"og:description\" content=\"Just like the Nigerian Communications Commission (NCC), the leadership of the Central Bank of Nigeria (CBN) has informed the 13 banks that extended a $1.2 billion facility to Etisalat Nigeria that it would resist the move by the lenders to take over the network operator without its express approval. 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