Etisalat Group’s share price on the Abu Dhabi securities Exchange was among the top 10 performing stocks today after the company announced that it has been forced by a consortium of banks to transfer its ownership in Etisalat Nigeria to United Capital Trustees.
The company’s share price was up 0.29 percent to close at AED 17.35 (N1, 496.81) with more than 1.5 million of its shares traded. Etisalat Group which owns 45 percent ordinary shares and 25 percent preference shares in Etisalat Nigeria announced on June 20 that following a default in facility agreement with a consortium of Nigerian banks and inability to reach a restructuring agreement, it received on July 9 an enforcement notice which requires it to transfer 100 percent of its shares to United Capital Trustees by June 15 which was later extended to June 23.
Etisalat Group also noted that it has already written off to nil in its books, its shareholding in Etisalat Nigeria with its only financial exposure to its Nigeria subsidiary limited to AED 191 million (N16.5 billion).
The consortium of 13 banks that lent money to Etisalat are exposed to the tune of US$1.72 billion (N628 billion).
Sources inside the banks say that Etisalat Group, by transferring its shares to a trustee, is trying to externalise the troubles of its Nigerian subsidiary from the group’s balance sheet and avoid liability.
BusinessDay learnt that some of the banks that extended the loans to Etisalat had sought guarantees from the parent company in addition to the collateral from Etisalat Nigeria. However, Etisalat Group may have discharged itself of the guarantees by transferring its shares.
Etisalat Nigeria also announced yesterday that discussions are on-going regarding other issues such as the trading name during the “transition phase” when United Capital will be holding on to the shares of the company. The Telco, which houses some 23 million subscribers, said that operations and services to subscribers will remain normal and will in no way be affected by its troubles.
“We will continue to tap into the rich, creative and innovative resources within our workforce to build a stronger business upon the stable foundation we have laid in our 9 years of operations. Etisalat Nigeria wishes to express its profound gratitude to the Government, the Nigerian Communications Commission, (NCC) and the Central Bank of Nigeria for their patriotic zeal and tireless efforts at ensuring collaborative and productive engagement. We are also appreciative of the tremendous support we have received from the media since inception and we count on their continued support as we transition to a stronger business. We will update our stakeholders and the public on further developments shortly.”
