Access Bank, others take over Etisalat Nigeria

• A consortium of banks, led by Access Bank PLC and other Nigerian and

foreign banks, has taken over the management of Etisalat Nigeria, effective

June 15.

According to Premium Times, the takeover followed 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 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 filing to the Abu Dhabi Securities Exchange in Abu

Dhabi, United Arab Emirate. The filing, with reference number

Ho/GCFO/152/85, and dated June 20, 2017 signed by Etisalat Group Chief

Financial Officber, 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 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, persuaded the banks to rethink their threat

and give Etisalat a chance to renegotiate the loan’s repayment schedule.

Late last week, PREMIUM TIMES reported exclusively that Etisalat was

sinking deeper into trouble, with Mubadala, its majority shareholder,

representing Etisalat of UAE, on the verge of pulling out following

irreconcilable differences concerning the loan issue.