$1.2bn debt: UAE agrees to recapitalise Etisalat

$1.2bn debt: UAE agrees to recapitalise Etisalat

..As telcoms get CBN’s priority forex window

Etisalat Nigeria’s estimated 23million subscribers can now heave a sigh of relief as the anxiety over its possible takeover by 13 creditor banks has now been laid to rest with its parent company, Etisalat Abu Dhabi, showing stronger willingness to inject fresh funds to recapitalise its subsidiary.

This was part of the outcomes of a meeting early this week in Abuja, between the Nigerian Communications Commission, (NCC), the Central Bank of Nigeria (CBN), 13 local banks and representatives of the firm’s largest shareholders from Abu Dhabi in the United Arab Emirates.

Executive Vice Chairman of the NCC, Prof. Umar Garba Danbatta, who gave hints on the delibrations of the crucial meeting at an interactive in Lagos yesterday, said that discussions centred on how to reschedule the $1.2billion debt with its accruing interest to facilitate the commencement of its servicing by the company.

He said that the resolution of the debt impasse was part of the Commission’s intervention aimed at ensuring the growth of the telecoms industry and the Nigerian economy, assuring that the servicing of the $1.2billion debt would commence soon.

According to him, “Etisalat has about $2billion of its estimated $20billion global networth in Nigeria against which the Abu Dhabi-based parent company affirmed it would not abandon Africa’s largest market because of obligations owed local banks. Although he could not specify when the UAE telecommunications investor would inject the fresh funds into its Nigerian arm, he assured the Commission would continue to partner relevant stakeholders to encourage investors through the provision of level playing field.

Etisalat Nigeria had signed a $1.2 billion medium-term facility with a consortium of 13 Nigerian banks in 2013, which it used to refinance an existing $650 million loan and fund a modernisation of its network.

However, following the failure of the company to meet its debt servicing schedule agreed since 2013, the Nigerian banks, prodded by their foreign partners, took Etisalat to the Central Bank of Nigeria (CBN) and the NCC.

Although Etisalat blamed its inability to fulfil its obligation to the banks on the current economic recession in Nigeria as well as the depreciation of the naira, the banks said their attempt to recover the loan by all means was fuelled by the need to cut down on the rate of their non-performing loans.

According to Prof Umar Garba Danbatta, the telecommunications industry has contributed a whopping sum of N15 trillion to the economy since inception in 2001 and remains a critical stakeholder in the Nigerian economy.

Speaking to ICT journalists in Lagos, Danbatta informed his audience that the industry also contributed nine per cent in the first quater of 2017 and that  since his assumption of office, telecoms industry had contributed per quarter to the gross domestic product (GDP) of between N1.43 and N1.45 trillion respectively. He stressed that despite the recession, the industry would continue to thrive especially as the Commission had secured a priority window for foreign exchange (forex) from the Central Bank of Nigeria for telecoms service providers to leverage on inorder to cushion the effect of the current economic situation.

He said to its foreign currency window would enable them secure much needed spares needed to improve quality of service.

Dambatta also, frowned at the deteriorating quality of service from the telecoms companies while expressing optimism that the new forex window would help them improve on their service delivery to subscribers.

He equally decried the growing incidence of willful destruction of telecoms infrastructure in various states by hoodlums, stressing that NCC would continue to engage with states and local authorities to improve right of way to the operators in line with extant laws that treat such as critical national infrastructure .