Speculation Etisalat foreign investors may pullout creates anxiety

The unsettled $1.3 billion debt, which Etisalat Nigeria is owing a consortium of banks, led by Access Bank, is said to be compelling Mubadala, the major investors in the telecommunications outfit to indicate willingness to pull out of the company.

Though the investors are silent over the unsettled debts as being the main reason for the speculated divestment, its position in recent times had been that the telco has not posted any profit since 2009 it made its debut in Nigeria.

Mubadala, an Abu Dhabi Government-owned investment and development company, controls about 70 per cent of the shares in Etisalat along with Etisalat UAE mobile, with Emerging Markets Telecommunications Services (EMTS) promoted by Hakeem Bello-Osagie, owning the remaining 30 per cent.

“The survival of Etisalat,” said an official of the Nigerian Communication Commission (NCC) pleading for anonymity, “lies on the local investors accepting to sell off some of their equity shares in the firm .

“From the series of meetings, held to reconcile the banks’ statement of account with Etisalat, we have discovered that the only way that the said loan could be settled is to attract more investment fundings, which the current investors are yet to give approval to.

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“Even the Central Bank of Nigeria (CBN) has, through its representatives at the reconciliation meetings, supported the idea of throwing open the investment window to others,” the NCC senior official disclosed in a phone chat with Ripples Nigeria.

But there is the fear of what might befall the company , if the foreign investors, who are controlling 70 per cent shares pull out fully.

Indications are high that the foreign investors are already looking for willing buyers of their shares in the company.

Sources say one of the conditions given by Mubadala is that the willing buyers will not change the name of the company, as it has been an international brand for more than two decades.

While the investors are wooing Glo to come on board, the local investors are not keen on having the brand go to a local competitor, if any deal is to be struck.

According Mr. Wole Adeyinka, a management consultant with one of the consortium of banks: “There is no official information with the banks to the effect that Mubadala is pulling out, but such is not impossible because the outfit has not been showing much interest in keeping to the terms of resolution reached at past meetings.”

Etisalat is the 4th largest telecoms operator, behind Airtel (34 million), Glo (37 million) and MTN (60 million), in Nigeria. It has real crises over loans and its inability to make profits.

 

 

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