How issues surrounding Etisalat’s $1.2bn loan crisis watered down Glo’s interest
More details emerged over the weekend indicating apparent loss of interest by Globacom in finalizing acquisition plans of the embattled Etisalat Nigeria.
The key factors that botched the plan was traced to the unresolved debt crisis, the entire handling, information management, claims and counter claims by the management plus the Dubai group’s sudden quit at a time the Nigerian company so much needed its assistance.
Another factor that further killed Glo or other undercover interests in the possible takeover cannot be unconnected with the warning by the telecoms sector regulatory authority, the Nigerian Communications Commission (NCC) that the law forbids Etisalat Nigeria from transferring the operational license to a third party without written permission, the report said the banks were weighing available options open to them to move the process forward.
Besides, analysts say Globacom may have been further upset with the collapse of Etisalat Nigeria talks with a group of private equity investors to raise funds to defray the loans.
Business Hilights gathered that the observed fruitless result of both Globacom’s earlier interest and others who Etisalat approached at a time forced the Central Bank of Nigeria (CBN) to raise serious concerns about the impact of the crisis on the country’s unemployment situation.
Again, the weak state of Asset Management Corporation of Nigeria (AMCON)’s finances may have watered down the possible intervention of the apex bank.
But the recent revelation by Ms. Jumai Mohammed of the London based Exotix Capital Limited that the recent directive by the CBN to exposed banks to halt further action on the Etisalat’s debt matter, was an indication that some form of bridge funding could be under consideration to cover the period until a new investor emerges.
It was not however clear when a new investor will emerge or if the ongoing undercover recovery process will stand the test of time.
Part of the undercover recovery process may not be unconnected with the latest twist rising from a letter written by NCC to the 13 banks seeking audience with the management of Access Bank and others.
The letter, dated June 21, was addressed specifically to the Managing Director (MD), Access Bank, while the Governor of the Central Bank of Nigeria (CBN); the MDs of Guaranty Trust Bank; Zenith Bank and United Bank for Africa Plc were copied.
Parts of the mail which said ‘Indebtedness of Etisalat to a consortium of banks’, was signed by the Executive Vice Chairman and Chief Executive Officer, Prof. Umar Danbatta.
NCC said “in view of the foregoing, it has become imperative that there is a meeting between the consortium of banks and it (NCC) to discuss the issues and find a lasting resolution.”
NCC however, stated that while it recognizes the right of the banks to foreclose on the debt, it is expedient to draw the lenders attention to certain salient issues.
According to NCC, the Nigerian Communications 2003, Act S38 provides that:
“S38 (1) 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 any party unless the prior written approval of the commission has been granted.”
“S38 (2): A licensee shall at all time comply with the terms and conditions of the license and the provisions of this Act and its subsidiary legislation. Condition 12 of the Unified Access Service License (UASL) issued to EMTS also mirrors the provisions of the NCA 2003, which is reproduced above.
Condition 15 of the license provides that EMTS shall notify and obtain the prior approval of the commission in respect of any change in the control of any of the shares in the license and such notification shall be given as soon as practicable prior to the proposed change in structure.
