Leading capital market pundits and leadership structures of shareholders associations have waded in to the Snell speed handling of the $1.2bn syndicated loan default between Etisalat Nigeria and a consortium of 13 banks.
Running for months now, Etisalat Nigeria had been in talks with Nigerian banks to restructure a $1.2bn loan after missing repayments, but there are indications that a party is riding on a delaying strategy to gain no existing time and sympathy.
The loan is a seven-year facility agreed with 13 banks in 2013 to refinance a $650m loan and fund expansion of its network.
Firing the first shot in the matter was vociferous analyst, and National Coordinator of Progressive Shareholders Association of Nigeria (PSAON), Mr. Boniface Okezie, advised the banks should approach the court for receivership if Etisalat failed to settle the debt, noting that neither the Nigerian Communications Commission (NCC) nor the Central bank of Nigeria (CBN) can help them because they were not signatories to the deal in the first instance.
Giving an insight on the issue for the first time on Tuesday, he made it clear that the banks had obligations to their shareholders in terms of dividend payment at the end of the financial year, insisting that the debt must be paid.
Toeing a related line, Mr Godwin Anono, the Chairman of Nigeria Professional Shareholders Association (NPSA), said that the company should settle the debt and desist from making unnecessary noise about the whole thing, noting that the said transaction was in line with the customer-bank relationship, noting that terms and conditions must be obeyed.
According to him, the shareholders were in support of the banks to acquire the company if it failed to settle the loan, stressing that “This is like any other transaction, it’s not government business and I stand on existing protocol that the banks should acquire the company”.
In his argument, Head Research at SCM Capital Limited, Mr Sewa Wusu, averred that the issue of loan between Etisalat and the consortium of banks was a customer-bank relationship which ought to be settled amicably with terms agreeable to both parties.
He disclosed that the involvements of both federal agencies lacked merit in law as the issue was beginning to elicit concerns in the banking industry given the level of amount involved and its potential impact on the balance sheets of those banks involved.
Wusu was quick to assert that “The monetary authority is also involved to ensure prompt settlement of the situation among the parties”.
Business Hilights gathered that Etisalat had on June 20, said it had been instructed to transfer its 45 percent stake in Etisalat Nigeria to a loan trustee and added that it had been notified to transfer its stake by June 23, saying that the stake had a carrying value of zero on its books.
The ground reason for the position of banks shareholders and industry observers for calling for action by the banks is that the involvements of both NCC and CBN which stepped into the fray to prevent a takeover by the banks, had clearly failed to produce an agreement on restructuring the debt or put the banks on a safer position.