NCC wades into Etisalat’s $1.7bn indebtedness to banks

Following news reports that a mobile phone operator in Nigeria, Etisalat, is having a running battle with a consortium of banks, which it obtained some loan facilities from in 2015, the sector regulator, the Nigerian Communication Commission (NCC), has intervened in the matter.

It was gathered that some foreign and Nigerian banks, including: GTB, Access Bank and Stanbic Bank, were among the financial institutions, which entered into a loan agreement to the tune of about $1.72 billion in 2015 with Etisalat.

The deal was said to have also involved a foreign-backed guaranty bond to enable the company access the loan facilities with which it could carry out major network rehabilitation and expansion of its operational base in Nigeria.

But due to pressure from the foreign partner and from other quarters, the banks were said to have dragged Etisalat before the CBN and the NCC, reporting failure of the company to meet its timetable in servicing the debt, accordingly.

Though the management of the company blamed any shortcoming in meeting its obligations on the country’s recession, which made it difficult to meet target, the consortium of banks said they were being pressured by the Asset Management Company of Nigeria (AMCON) to reduce the rate of toxic loans in the system.

An official of one of the banks, who would not want to be named, said there was an understanding with the debtor firm on how to go about servicing the loan, but such was not met in 2016.

Read also: Access Bank posts N90.3bn profit in 2016

“The business community is affected by the recession, no doubt, there are options for Etisalat, including asking for bankruptcy status, which will see it having receivership management appointed to over see to its running,” the official advised.

But Mr. Olaniyi Olukoya, NCC senior official said it is not only Etisalat that is in debt. he added that the regulator had already waded into the matter with meetings scheduled with the operator, the CBN and the banks.

On the recommendation of possible take over of the Etisalat, Olukoya put it this way:”Nothing calls for that. The company is very viable but is negotiating itself out of loan servicing.

“Etisisat is not the worst, there are so many debt-ridden companies from other sectors of the economy, but the happiness is that from its returns to its investors, as contained in its quarterly records, it is not doing badly as to be declared bankrupt,” he concluded.

At the Corporate Affairs department of the officials declined to comment on the issue, claiming they had not been briefed.

A phone call to the office of the company’s CEO, Mr. Matthew Charles Willshe, was picked by a lady, who said the CEO was in a board meeting.

The position of Etisalat management over the issue would be made public soon, according to a reliable source, who pleaded anonymity.

“It is a breach of trust for a bank to disclose its business dealings to the public, this means that Etisalat may press for CBN sanction against the banks that have thrown the transaction before the public,” the source added.

Etisalat, belongs to a family business network in the Middle East, but was attracted into Nigeria by a Kano-based business mogul in 2009.

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