AMCON, banks, foreign investors’ line up for hostile acquisition of debt-ridden Etisalat
The state of non-performing loans and chronic debt profile of hitherto bustling telecoms giant, Etisalat has started to elicit takeover discussions amongst three set of groups including the traditional bad debts buyers, Asset Management Company of Nigeria (AMCON), banks and veiled foreign investors.
The jostling is becoming hotter since the intervention of the Nigerian Communication Commission (NCC), to broker a peaceful resolution between Etisalat Nigeria and a consortium of banks apparently failed to hold enough water after all.
Etisalat is Nigeria’s fourth largest telecoms operator, which commenced business in Nigeria in 2009 with a current subscriber base of 21 million as at January 2017.
Business Hilights gathered that the consortium of some foreign and Nigerian banks, lead by Guaranty Trust Bank, Access Bank and Zenith Bank, have been having a running battle with the mobile telephone operator over a loan facility totalling $1.72 billion (about N541.8 billion) obtained in 2015.
It was not clear if the loan was well utilized for what it was meant which include financing major network rehabilitation and expansion of its operational base in Nigeria.
The banks seemed not ready to agree to any other term but a hostile takeover pending when they will recoup their money which came with a foreign-backed guaranty bond.
The main trouble apparently started when Etisalat failed to meet its debt servicing schedule agreed since 2016, thus forcing the three Nigerian banks which were under the pressure of their foreign partners, took Etisalat to banking sector regulator, the Central Bank of Nigeria, CBN, and telecoms regulator, the Nigerian Communications Commission (NCC).
Whereas Etisalat continue to give the popular reason every debtor in Nigeria is giving which is econo, NCC, AMCON, mic downturn and recession, analysts say the major driver of the banks quest to get their money today and tomorrow cannot be unconnected with the hot chase from the AMCON to brush down their non-performing loans (NPLs).
Finance and debt management consultants are of the view that some of the best options for Etisalat in this circumstance include a surprise merger which may involve a deep pocket foreign investor who would rely on the dollar disparity to invest in the company. Another option include an official declaration of bankruptcy which would prompt the affected banks to move in and appoint a management receivership charged with the tailored responsibility of investing and recouping both old and new inflow.
It was not clear if the NCC had clearly taken an approval decision for the takeover as at late Wednesday evening.
However, the spokesperson of Etisalat, Oluseyi Osundedo in an interview seemed to have assured that the embattled firm was in discussion with the banks and “our discussion had reached an advanced stage. There is no cause for alarm.”
But like ordinary Nigerians and some closure-bond companies, she blamed her company’s woes on the current economic downturn and lack of access to forex.
However, some finance and debt management consultants said Etisalat failed to do the right thing immediately it got the loan in 2015, otherwise, it wouldn’t had been in this mess.
