The Nigerian arm of South Africa’s Standard Bank, Stanbic IBTC Bank, has an exposure of $24 million to Etisalat Nigeria, it said on Wednesday, adding restructuring talks were “ongoing”.
The Nigerian arm of Abu Dhabi-listed telecoms company Etisalat has been discussing with 13 local banks about renegotiating the terms of a $1.2 billion loan after missing a payment.
“The members are continuing discussions with Etisalat with the hope of restructuring the loan,” the bank told an analysts’ call.
The consortium of some foreign and Nigerian banks have been having a running battle with the mobile telephone operator over a loan facility totalling $1.72 billion (about N541.8 billion) obtained in 2015.
The loan, which involved a foreign-backed guaranty bond, was for Etisalat to finance a major network rehabilitation and expansion of its operational base in Nigeria.
However, following the failure of the company to meet its debt servicing schedule agreed since 2016, the banks, prodded by their foreign partners, reported Etisalat to banking sector regulator, the Central Bank of Nigeria, CBN, and its communications sector counterpart, the NCC.
Although Etisalat blamed its inability to fulfil its obligation to the banks on the current economic recession in Nigeria, the banks said their attempt to recover the loan by all means was fuelled by the pressure from the Asset Management Company of Nigeria, AMCON, demanding immediate cut down on the rate of their non-performing loans.
One of the options the banks have proposed to Etisalat management as a middle way out of the crisis was for it to request for a bankruptcy status.
But, the NCC appears not to be favourably disposed to the takeover proposal, the source said, as it believed that Etisalat is not only a viable going concern but also willing and able to negotiate the servicing of its loans.
Etisalat is Nigeria’s fourth largest telecoms operator, with about 21 million subscribers as at January 2017, according to the NCC. It commenced business in Nigeria in 2009.
Olusola Bello with agency report
