The Abu Dhabi-listed telecoms company Etisalat Nigeria in talks with the local banks to renegotiate the terms for the $1.2billion loan it took with the bank over four years back after the telecom giant missed a payment.
The payment was missed as a result of Nigeria economic melt-down, currency devaluation, dollar shortages on the country’s interbank market. The management of the company are in discussions with other bankers and have already taken for a significant time.
Recently the bank have not taken over the company and they are hoping that they will settle the matter and find a method of settlement and to renegotiate terms, Mr Dikko said.
Etisalat (Emirates Telecommunications Group) has up to 40% stake in its Nigerian associate, which accounted for around 3.7% of the group’s revenue in 2013.
In 2013, Etisalat Nigeria signed a $1.2billion medium-term facility with about 13 Nigerian banks, which the company used to refinance a pre-existing $650m loan and fund a modernisation of its network.
Etisalat performed well this past year and it absolutely was still making good profit at the amount in profit and earnings before interest, tax, depreciation and amortisation, while loan repayments have been updated until now.
The company is now considering all of the options which may include converting the loan into naira, and also don’t want to predict the end result of talks with the banks.
Etisalat gave notice to Nigerian banks stating it would miss the February’s payment; this prompted an emergency session with the lenders. The bank also said that there is also a shareholder loan the company will like to see that also converted into equity which will in return put less pressure on cash flow and its receivables.
The banks want Etisalat to boost its stake in its business in Nigeria to be able to reduce the danger of the business closing or leaving country as a result of debt.
List of Nigeria Banks Involved in the loan.
Stanbic IBTC Bank
In 2013, at a time the Nigerian economy was booming, most of this companies took out a dollar loan due to its investment prospect. Meanwhile the economy grew at a well balanced currency rate of 7%, and oil prices skyrocketed.
However things have changed, there is a short of dollar supply and with the oil prices and revenue falling which has pushed the economy into a recession, such which hasn’t been witnessed in many years.
In the last months, one of the largest airline Arik Air has similar problem, owing up to N147 billion of unpaid debt and put in a receivership by AMCON.