Banks owed USD1.72 billion by Etisalat Nigeria said they want the company to pay its debt and not interested in running the company.
GTBank, Zenith Bank and Access Bank were reported to have taken over the management of Etisalat Nigeria, the smallest mobile carrier in Nigeria with 21million subscribers.
About 40% shares of the company is owned by Etisalat UAE. Its foreign partner which guaranteed the loan and a refinancing loan of 1.2 billion in 2014 had backed out from paying creditors of the company which led to the takeover of the mobile carrier.
Reports from various quarters suggest Etisalat UAE might be converting the loan to equity. An arrangement that will see the Middle East company own an overwhelming majority stake in Etisalat Nigeria.
The company started operations in 2008 as a voice and data company. However, it’s ability to compete among MTN, Glo and Bharti Airtel has further weakened due economic pressure and a competitive strategy that further increase its expenditure with less returns to its bottom line.
The company seems not to have reported its first profit. This status as a revenue earning and no profit in its balance sheet will further weaken investor and shareholder confidence.
Etisalat Nigeria is not quoted and it is not likely to be listed on the NSE anytime soon.
With an history of a well publicized loan default, its credit rating might be below junk across all the three major credit ratings agency.
The company issued a statement denying its takeover saying it is in talks with affected banks to resolve the matter.
The NCC, the telecommunications industry regulator has also rallied the CBN to find an immediate solution to an embarrassing situation that might have far reaching consequences not just for Etisalat but the telecoms ecosystem as a whole.
MTN Nigeria, the largest mobile carrier in the market is also looking at restructuring its operations after MTN Group, its parent company posted its first ever loss in 20 years.