A consortium of banks led by Access Bank PLC and other foreign banks, has taken over the management of Emerging Markets Telecommunications Services, EMTS owners of Etisalat Nigeria for not meeting up with banks on debt .
The take over which took Effect from June 15 was due to the failure of the telecommunication provider once led by the former Chairman of United Bank for Africa, UBA, Hakeem Bello-Osagie, to reach an agreement with the banks on debt restructuring plan in the protracted $1.72 billion (about N541.8 billion) debt impasse
EMTS Holding BV, which was established in the Netherlands, has up to June 23 to complete the transfer of 100 percent of the company’s shares in Etisalat to the United Capital Trustees Limited, the legal representative of the consortium of banks.
Etisalat Group, the parent company of Etisalat Nigeria, announced the takeover on Tuesday in a filing to the Abu Dhabi Securities Exchange in the United Arab Emirate.
According to Etisalat Group Chief Financial Officer, Serkan Okandan, efforts by EMTS to restructure the repayment of the syndicated loan by a consortium of banks to Etisalat Nigeria collapsed.
In the filing dated June 20, 2017 with reference number Ho/GCFO/152/ Okandan said “Further to our announcement dated 12 February, 2017, Emirates Telecommunications Group Company PJSC, “Etisalat Group” would like to inform you that Emerging Markets Telecommunications Services Limited EMTS “the company, established in Nigeria and an associate of Etisalat Group with effective ownership of 45% and 25% ordinary and preference shares respectively, defaulted on a facility agreement with a syndicate of Nigerian banks “EMTS Lenders”.
Subsequently, discussions between EMTS and the EMTS Lenders did not produce an agreement on a debt restructuring plan.
According to reports, the Company received a default and security Enforcement Notice on 9 June 2017 requesting EMTS Holding BV (EMTS BV) established in the Netherlands, and through which Etisalat Group holds its interest in the company requiring EMTS BV to transfer 100% of its shares in the company to the United Capital Trustees Limited, the Security Trustee of the EMTS Lenders by 15 June 2017.
Inside sources gathered that EMTS Lenders extended the deadline for the share transfer to 5.00 pm Lagos time on 23 June 2017.
Inside Sources gathered that Etisalat Nigeria has been under pressure since 2016, following the demand notice for the recovery of a $1.72 billion (about N541.8 billion) loan facility it obtained from a consortium of banks in 2015.
The loan, which involved a foreign-backed guaranty bond, was for the mobile telephone operator to finance a major network rehabilitation and expansion of its operational base in Nigeria.
When unable to meet its debt servicing obligations agreed since 2016, the consortium, prodded by their foreign partners, threatened to take over the company and its assets across the country. But the intervention of the telecom sector regulator, Nigerian Communications Commission, NCC, and its financial sector counterpart, the Central Bank of Nigeria, CBN, persuaded the banks to rethink their threat and give Etisalat a chance to renegotiate the loan’s repayment schedule.
But late last week, It was reported exclusively that Etisalat was sinking deeper into trouble, with Mubadala, its majority shareholder, representing Etisalat of UAE, on the verge of pulling out following irreconcilable differences concerning the loan issue.
