Abu Dhabi Etisalat terminates management agreement with Etisalat Nigeria

Etisalat

Abu Dhabi-based Etisalat said it has terminated its management agreement with Etisalat Nigeria. The group said the agreement which covers technical support was ended since the 30th of June, 2017.

The group also confirmed that the termination of agreements governing the use of Etisalat’s brand will be activated by July 21, 2017.

The United Araba Emirates group said it has started negotiation with Etisalat Nigeria which is now represented by EMTS, on a new agreement for technical services, strategic procurement support, use of Etisalat brand.

The group said all other discussions and handover of stake are the works and not yet finalised with the new parties involved in running the group.

It would be recalled that Etisalat UAE had announced its exit from the struggling mobile carrier after debt negotiations with 13 local lenders and other international consortium failed to reach a concrete stage. A new management has since being appointed for Etisalat Nigeria.

The company said in the statement announcing its board that Dr. Joseph Nnanna will be the chairman of the board of directots. While Mr. Oluseyi Bickersteth was appointed as an executive director, Mr. Ken Igbokwe was appointed as an independent non-excutive director.

To head the new company, Mr. Boye Olusanya was appointed as the chief executive officer while and Mrs. Funke Ighodaro was appointed as the chief financial officer. Mr. Boye Olusanya has been confirmed as Chief Executive Officer, to replace Mr. Matthew Willsher, while Mrs. Funke Ighodaro takes over from Mr. Olawole Obasunloye as Chief Finance Officer.

The company said the new management was working with the consortium of Lenders, working with the regulators NCC and the Central Bank of Nigeria are committed to the on-going efforts to restructure the company towards a path of long-term success of the business and the appointment of a seasoned board of directors and top management is a testament to this.

It is not certain if Etisalat will want to drop the use of the brand name and identity given the enormous task on its hands to pay back its creditors. Analysts also suggested that the company would rather face its imminent problem of stabilising its operations to meet its obligations.

However, Hatem Dowidar who spoke for the UAE group said all its directors have left the company and that EMTS has just about three weeks before it will be required to stop using the brand name.

In an exclusive chat he had with Reuters, Hatem said:

“There’s a new board and we are not part of that company. We have sent our termination letter for the management agreement,”

When he was asked whether Etisalat will be staging a comeback into the market: “The train has left the station on that one. Being in that market as an investor … are we willing to risk more money compared to the reward for the long-term?”

Hatem hinted that Etisalat might look at merging with some local players in other countries where it is a smaller player in. He added that “(Nigerian) lenders may try to continue to operate the company until they find a buyer (or) they may merge the company with the existing players in Nigeria”. He said, adding that it was tough to say what lenders would do.

“The brand agreement in either of these two scenarios won’t be a long-term thing, so we take out the brand; in the long term Etisalat won’t be in Nigeria,” he concluded.

There is also an aura of uncertainty as to who owns the company apart from the banks who are being represented by United Capital Trustees. Last week, PageOne.ng gathered that Dangote Industries is said to have acquired 60% stake in Etisalat Nigeria. This is based on unconfirmed but reliable sources in Nigeria’s financial services sector.

Dangote Industries is owned by Africa’s richest man, Aliko Dangote with investment across various sectors of Nigeria and Africa’s economy.

According to the sources who pleaded not to be named, French and one of the major mobile carriers in Africa, Orange Telecom as well as Vodafone are in high-level discussions to take up the remaining 40% stake in Etisalat Nigeria.

The rumoured acquisition might further lend credence to suspicion about the pedigree of the newly constituted board of directors for Etisalat Nigeria. Funke Ighodaro, the newly appointed CFO of the mobile carrier was Chief Financial Officer of Tiger Brands Limited from 2011 to 2016. Tiger Brands was taken over by Dangote after Tiger Brands South Africa sold their majority stake back to Dangote in 2016.

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