There are media reports that Etisalat, the smallest mobile carrier in Nigeria might declare bankruptcy and or take over the telecom company over debt defaults.
According to The Nation Newspaper, the unpaid loan USD1.2 billion loan was granted to the company by a consortium of local banks.
Stanbic IBTC, a unit of Standard Bank South Africa, GTBank and Access Bank all tier 2 banks extended the loan to Etisalat in 2015 for major network upgrade.
A consortium of local banks may assume the management of Etisalat Nigeria over unpaid loans extended to the telco about two years ago.
An executive of the company who was quoted by The Nation said “Yes we raised funds from a consortium of banks about two years ago in the country. We have been making conscious efforts to repay the debts and we have indeed repaid part of it. We are engaging with the banks, negotiating with them with a view to coming out with a method of repaying the loan”.
Etisalat started operations in Nigeria in October 2006 trading as etisalat Nigeria. The company was registered as Emerging Markets Telecommunication Services (EMTS). According to the company’s disclosure, EMTS is a private Nigerian company in partnership with mubadala development company and etisalat of the united arab emirates.
Etisalat has about 21 million subscribers in Nigeria, many of whom use the network as their second number alongside MTN, Glo and Airtel. Etisalat benefitted from the mobile number portability policy that allows subscribers to move from one network to another.
Etisalat is not a public company, it will be hard to estimate how much it earns in revenue and whether it has turned in any profit since it started operations in 2006.
MTN Group is also struggling to stay afloat due to huge financial commitments linked to the NGN330 billion fine it is paying to the Nigerian government for the next three years. Apart from posting its first ever loss in 20 years, Moody’s also warned that MTN Group might find it hard to sell more debt so far as its Nigerian unit continues to generate less cash into the group’s kitty.
