Zenith Bank of Nigeria said it has made a provision on 30 percent of its loan to 9mobile, formerly known as Etisalat Nigeria. The bank’s chief executive Peter Anangbo made the disclosure in a conference call, reuters report.
“We have taken about 30 percent … as a provision which we believe is very prudent as the company is undergoing restructuring … to prepare for a new investor,” Peter Amangbo told a conference call.
Nigerian regulators stepped in last month to save Etisalat Nigeria from collapse and prevent lenders placing the country’s fourth biggest telecoms group into receivership, prompting a board, management and name change.
Earlier this month, one of the lenders to 9mobile, First City Monument Bank (FCMB) said the mobile carrier has received a relaxed repayment structure for its USD1.2 billion debt.
According to FCMB, 9mobile will be given more time to get buyers. The company announced through the Central Bank of Nigeria that it has appointed Citi and Standard Bank as advisers in its sales pitch to investors
Etisalat Nigeria was heavily indebted to a consortium of local and international banks to the tune of USD1.72 billion. Several restructuring of the loan was said to have failed. Affected banks said they fear the loan might become more toxic which will harm their existence.
Access Bank Plc confirmed sometime in March that it’s share of the loan was up to USD131 million. The bank’s impairment charges went up beyond analyst estimates. GTBank and Zenith Bank were all affected by the pile of such loans in their books. In its 2016 full year result released, GTBank disclosed it booked over 400% increase in impairment charges year on year.
The banks involved in 9Mobile’s loan deal are: Zenith Bank GTBank, First Bank , UBA, Fidelity Bank, Access Bank , Ecobank, First City Monument Bank , Stanbic IBTC Bank and Union Bank.