Access Bank has now taken over
the management of telecommunication company, Etisalat Nigeria.
Besides Access Bank, other local
and foreign banks are said to be part of the takeover of the telecommunication
company which takes effect from June 15.
The take-over came as a result of
a futile effort by Emerging Markets Telecommunications Services, EMTS, promoted
by-one time Chairman, United Bank for Africa, UBA, Hakeem Bello-Osagie, to
reach agreement with the banks on debt restructuring plan in the protracted
$1.72 billion (about N541.8 billion) debt impasse.
However, EMTS Holding BV,
established in the Netherlands, has up to June 23 to complete the transfer of
100 percent of the company’s shares in Etisalat to the United Capital Trustees
Limited, the legal representative of the consortium of banks.
Etisalat Group, the parent
company of Etisalat Nigeria, announced the takeover on Tuesday in a letter
filed to the Abu Dhabi Securities Exchange in Abu Dhabi, United Arab Emirate.
A letter dated June 2017, with
No. Ho/GCFO/152/85 signed by Etisalat Group Chief Financial Officer, Serkan
Okandan, noted that efforts by EMTS to restructure the repayment of the
syndicated loan by a consortium of banks to Etisalat Nigeria collapsed.
It added, “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
extend the deadline for the share transfer to 5.00 pm Lagos time on 23 June
2017,” the filing said.
The Telecommunication company 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 for the mobile telephone operator to finance
a major network rehabilitation and expansion of its operational base in
Nigeria.
Unable to meet its debt servicing
obligations agreed since 2016, the consortium, prodded by their foreign
partners, threatened to take over the company and its assets across the
country.
But, the intervention of the
telecom sector regulator, Nigerian Communications Commission, NCC, and its
financial sector counterpart, the Central Bank of Nigeria, CBN, succeeded in
persuading the banks to rethink their threat and give Etisalat a chance to renegotiate
the loan’s repayment schedule.
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