TheNewsGuru

Tag: Etisalat Nigeria

  • Etisalat update: Why Chairman Osagie is resigning

    The Chairman of Emerging Markets Telecommunication Services Limited (EMTS) operating Etisalat Nigeria, Hakeem Bello-Osagie, has resigned, and a source has disclosed why the boss is stepping down.

    The source closed to the matter disclosed on Friday that the Chairman is resigning following the approval of a restructuring plan for the embattled telecoms firm by its management board.

    “Although the chairman had planned to leave immediately the banks made the take-over move, he opted to tarry until a road map for the company was finalised.

    “The timing of the resignation was strategically delayed till now when stakeholders have agreed a plan.

    “The development also reflects Mr. Bello-Osagie’s deep commitment to protecting the interest of all stakeholders. It is now expected that Etisalat Nigeria under its new shareholding structure will navigate through its current loan repayment challenge with minimum impact.

    “Over the last several months, the chairman has worked extensively with critical stakeholders to prepare clearly articulated strategies and robust road maps that will mitigate the impact of the new shareholding restructuring and realignment on the operations and management of the 4th largest telecoms player in Nigeria,” disclosed the source.

    With this development, the new board will assume control of Etisalat.

    “Further announcements on the composition of the new board are expected from the stakeholders,” the source said.

     

  • Etisalat debt predicament: 13 Banks’ shareholders mount huge pressure

    …ask telecoms firm to clear debt

    Shareholders of the 13 banks involved in the N1.2 billion loan for Etisalat Nigeria have asked the telecoms company to pay up its debt in order to guarantee the payment of annual dividends.

    The shareholder group told the News Agency of Nigeria in Lagos on Tuesday that the company risks legal action by the banks if it failed to settle its outstanding loan obligation.

    The National Coordinator, Progressive Shareholders Association of Nigeria, Boniface Okezie, said the affected banks should approach the court for receivership if Etisalat failed to settle the debt.

    Mr. Okezie said in view of the obligations the banks have to their shareholders, in terms of dividend payment at the end of the financial year, it was incumbent on Etisalat to pay the debt.

    On his part, the Chairman of Nigeria Professional Shareholders Association, Godwin Anono, said the company was under obligation to settle the debt, since the transaction was in line with the customer-bank relationship, involving terms and conditions that must be obeyed.‎

    Mr. Anono said the shareholders were in support of the banks’ move to acquire the company if it failed to settle the loan.

    “This is like any other transaction. It’s not government business. I stand on existing protocol to say that the banks should acquire the company if it fails to settle the debt,” he said.

    The Head Research, SCM Capital Ltd, Sewa Wusu, said where there was any breach of the terms and conditions of the loan between Etisalat and the consortium of banks, then the normal legal process should be followed.‎

    Mr. Wusu said the issue was beginning to elicit concerns in the banking industry considering the amount involved and its potential impact on the balance sheets of the banks banks.

    “Since the monetary authority is also involved in the negotiation, I am sure this will ensure prompt settlement of the situation among the parties,” he said.

    Etisalat had obtained a $1.2 billion (N377.4 billion) syndicated loan in 2013, from a consortium of 13 Nigerian banks, to finance a major network rehabilitation, upgrade and expansion of its operational base in Nigeria.

    The consortium of banks include Access Bank, Zenith Bank Plc, Guaranty Trust Bank Plc, First Bank Limited, Fidelity Bank Plc, First City Monument Bank (FCMB), Stanbic IBTC, Ecobank, United Bank for Africa (UBA) Plc and Union Bank of Nigeria Plc.

    Zenith Bank, Guaranty Trust Bank and Access Bank have the top three exposures of the total loan – N80 billion, N42 billion and N40 billion respectively.

    Etisalat Nigeria said last week it had paid about half of the initial loan (about N504billion), leaving a total outstanding sum of about $574 million.

    >>Also read: United Arab Emirates-based Etisalat Group says willingness to release its brand name is conditional

     

  • Etisalat Group willingness to release brand name conditional

    United Arab Emirates-based Emirates Telecommunications Group Company (Etisalat Group) might be unwilling to release the Etisalat brand to the consortium of banks, except the banks are prepared to fulfill certain conditions.

    Emerging Markets Telecommunication Services Limited (EMTS), operating as Etisalat Nigeria, is using the brand name after a contractual agreement with the UAE-based telecoms giant, TheNewsGuru findings reveal.

    TheNewsGuru reports Etisalat Group released the brand name to EMTS to operate in Nigeria after securing 45% and 25% ordinary and preference shares respectively. Etisalat Group is holding the shares in Etisalat Nigeria through EMTS Holding BV established in the Netherlands.

    After Etisalat Nigeria defaulted on a loan facility agreement with a consortium of Nigerian banks, the Security Trustee of the banks issued a Default and Security Enforcement Notice requesting EMTS Holding BV — established in the Netherlands, and through which Etisalat Group holds its interest in Etisalat Nigeria — to relinquish 100% of its shares.

    This is after subsequent discussions between Etisalat Nigeria and the lender banks failed to produce an agreement on restructuring the loan agreement.

    Etisalat Nigeria had obtained the $1.2 billion (N377.4 billion) loan in 2013 from the consortium of banks to finance a major network rehabilitation, upgrade and expansion of its operational base. The firm said last week it had paid about half (about N504 billion) of the initial loan leaving a total outstanding sum of about $574 million.

    Etisalat Group is saying the 45% ordinary and 25% preference shares it is having in EMTS Holding BV that permits it to operate as Etisalat Nigeria has a quantity of no importance.

    “The carrying value of these shares in Etisalat Group’s books is nil,” according to a letter signed by Etisalat Group Chief Financial Officer, Serkan Okandan, addressed to the Abu Dhabi Securities Exchange, and made available to TheNewsGuru.

    “The remaining financial exposure from the Company is related to operational services (such as international roaming) provided by Etisalat Group to EMTS, and management and technical and IP related agreements,” it added.

    Etisalat Group did not however overtly state in the letter that it had transferred 100% of its shares in Etisalat Nigeria to United Capital Trustees Limited, the Security Trustee of the banks, but it did confirmed the lenders extended the deadline from 9 June 2017 to 23 June 2017 5:00 pm Lagos time.

    Etisalat Group said the operational services, such as the international roaming, provided to EMTS, and the management and technical and IP related agreements is limited to an amount of AED 191 million (about N16.3 billion) as of March 31 2017, stressing this is the subject of ongoing discussions with EMTS and the EMTS lenders.

    “Should there be any material developments on this subject, a further announcement would be made in accordance with applicable Securities and Exchange rules and regulations,” the letter concluded.

    Meanwhile, the Nigerian Communications Commission (NCC), in a statement by its Director of Public Affairs, Tony Ojobo, has said “The grant of a license shall be personal to the licensee and the license shall not be operated by, assigned, sub licensed or transferred to another party unless the prior written approval of the commission has been granted;” quoting Section 38 and Sub-section 1 of the Nigerian Communications Act (NCA) 2003.

    According to the NCC, Sub Section 2 of the same provision equally states that, “A licensee shall at all times comply by the terms and condition of the license and the provision of this act and its subsidiary legislation”.

    >>Also read: $1.2bn loan: Banks refute takeover of Etisalat Nigeria

    The consortium of banks include Access Bank, Zenith Bank Plc, Guaranty Trust Bank Plc, First Bank Limited, Fidelity Bank Plc, First City Monument Bank (FCMB), Stanbic IBTC, Ecobank, United Bank for Africa (UBA) Plc and Union Bank of Nigeria Plc.

    Zenith Bank, Guaranty Trust Bank and Access Bank have the top three exposures of the total loan – N80 billion, N42 billion and N40 billion respectively.

    Whatever becomes of EMTS’s Etisalat Nigeria, the NCC has assured and reassured the over 21 million Etisalat subscribers that it will do all within its regulatory power to ensure that Etisalat subscribers continue to enjoy the services provided by the operator.

    >>Trending: Etisalat debt predicament: 13 Banks’ shareholders mount huge pressure

     

  • $1.2bn loan: Etisalat Nigeria dismisses investigation reports

    Embattled telecoms company, Etisalat Nigeria has dismissed reports it is under investigation by the EFCC over utilisation of the 1.2 billion dollars loan obtained from a consortium of banks.

    A statement by Mr Ibrahim Dikko, the Vice President, Regulatory and Corporate Affairs, Etisalat Nigeria on the company’s website in Abuja on Thursday described the reports as blatant false and most unfortunate.

    Etisalat Nigeria had obtained a 1.2 billion dollars medium-term seven-year facility for the purpose of expanding its network and improving the quality of service on its network.

    Dikko said that the economic downturn of 2015 and sharp devaluations of the naira negatively impacted on the dollar-denominated loan by driving up the loan value.

    He said that this prompted Etisalat to request a restructuring plan from the consortium.

    He said that the report was most unfortunate considering the damage such misleading information could have on its business and the entire communication industry in the country.

    Dikko said that a simple interrogation of the rigorous process for securing a syndicated loan from a consortium of reputable banks would have exposed the truth to the original writer of the story.

    He said that the concerned parties had access to its books and did not require an investigation into how the loan sum was utilised.

    “It is crucial for the media to correctly inform the general public by providing the relevant micro-economic context Etisalat Nigeria encountered in meeting up with the loan obligation.

    “Contrary to the widely reported misrepresentations about Etisalat Nigeria’s debt obligation to the consortium of 13 banks, it has become pertinent to set the records straight,’’ it said.

    Dikko said that Etisalat had consistently and conscientiously met with its payment obligations prior to this time.

    “As at today, we can categorically state that the outstanding loan sum to the consortium stands at 227million dollars and N113 billion, a total of about 574 million dollars, if the naira portion is converted to dollars.

    “This in essence means almost half of the original loan of 1.2 billion dollars has been repaid,’’ he said.

    He said that Etisalat had continued to service the loan up until February 2017, when discussions with the banks regarding the repayment restructuring commenced

    He further explained that the infrastructure investment and services for which the loan was secured were paid through its banks, adding that these were verifiable.

    “We hereby appeal to our media partners to continue to uphold the ethics of the profession by exercising some restraint particularly in the publication of such misleading and damaging information.

    “We have been accessible and remain available to the media to clarify or verify information when required,’’ he said.

     

  • Etisalat saga: NCC reveals legal implication, assures of network integrity

    The Nigerian Communications Commission (NCC) has revealed the legal implications of the takeover of Etisalat Nigeria by a consortium of banks while assuring subscribers of telecoms service provider of continuous quality service.

    This is coming on the heels of the change in the ownership structure of Etisalat Nigeria.

    The company had on Tuesday announced the divestment of part of its shares following its inability to meet up with the payment of a loan it took from the consortium of local and international banks, which amounted to N541 billion.

    In this wise, after the loan restructuring talks failed, the company had to cede a substantial part of its shares to the consortium of banks, led by Access Bank Plc.

    Following this development, there had been fears about a possible nosedive in the quality of service rendered by Etisalat Nigeria, which is regarded as one of the best service providers in the country.

    The NCC, in a statement by its Director of Public Affairs, Tony Ojobo, however, said it would continue to monitor Etisalat for the delivery of quality service.

    He drew the attention of the lender banks to Section 38 and Sub-section 1 of the Nigerian Communications Act (NCA) 2003 which spells out that, “The grant of a license shall be personal to the licensee and the license shall not be operated by, assigned, sub licensed or transferred to another party unless the prior written approval of the commission has been granted;”

    Ojobo, said that the lenders banks must take note of relevant provision of the NCA 2003 as well as relevant provisions of the laws guiding the transfer of licences issued operators by the telecoms regulator.

    According to the NCC, Sub Section 2 of the same provision equally states that, “A licensee shall at all times comply by the terms and condition of the license and the provision of this act and its subsidiary legislation”.

    Ojobo, who said that NCC is aware of the indebtedness of Etisalat Nigeria to the consortium of banks says that the telecoms regulator and its banking counterpart, the Central Bank of Nigeria (CBN), “mediated by holding several meetings with the banks, Etisalat and other stakeholders with a view to finding a resolution”.

    Despite the efforts of the two industry regulators of Federal Government, “regrettably these meetings did not yield the desired results”.

    “The NCC wishes to reassure the over 21 million Etisalat subscribers that it will do all within its regulatory power to ensure that Etisalat subscribers continue to enjoy the services provided by the operator,” the telecoms regulator stated.

     

  • Consortium of banks takes over Etisalat Nigeria

    After talks of Etisalat Nigeria debt restructuring plan reached stalemate, a consortium of banks will effective June 23 take over the business of Etisalat Nigeria.

    The parent company of Etisalat Nigeria, Etisalat Group, announced the takeover on Tuesday in a filing to the Abu Dhabi Securities Exchange in Abu Dhabi, United Arab Emirate.

    The filing, with reference number Ho/GCFO/152/85, and dated June 20, 2017 signed by Etisalat Group Chief Financial Officber, Serkan Okandan, said efforts by EMTS to restructure the repayment of the syndicated loan by a consortium of banks to Etisalat Nigeria collapsed.

    “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.

    “Accordingly, 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.

    “Subsequently the EMTS Lenders extended the deadline for the share transfer to 5.00 pm Lagos time on 23 June 2017,” the filing said.

    Etisalat 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 the consortium of banks, led by Access Bank PLC and other Nigerian and foreign 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.

    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.

    However, EMTS Holding BV, 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.

     

     

     

    Source: Premium Times