Access Bank PLC and a group of other Nigerian and international banks have taken over the management of Etisalat Nigeria.
This is due to the failed negotiations between the banks and the Tel Co giants concerning a protracted $1.72 billion (about N541.8 billion) debt owed by the company.
The takeover was announced on Tuesday by Etisalat Group, parent company of Etisalat Nigeria in a filing to the Abu Dhabi Securities Exchange in Abu Dhabi, United Arab Emirate.
Since the negotiations to reach a more favourable conclusion by Emerging Markets Telecommunications Services (EMTS) hit the rocks, United Capital Trustees Limited, the legal representative of the consortium of banks has given the company up to June 23rd to transfer to them 100 percent of its shares in Etisalat.
“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 Nigeria has since 2016 been put under pressure after failing to pay back about N541.8 billion loan from a group of local and international banks.
The Telco had hoped to reach some sort of agreement with the banks that would not involve a hostile takeover but those negotiations fell through.
The loan was to aid in the financing of a major network rehabilitation and expansion of its operational base in Nigeria.