Etisalat Group moves to exit Nigeria
By Kokumo Goodie, Lagos, Nigeria
Telecoms group Etisalat has terminated a management agreement with its Nigerian arm and given the business time to phase out the Etisalat brand in Nigeria, the Chief Executive of Etisalat International said this week.
Last week, the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) intervened to save Etisalat Nigeria from collapse after talks with its consortium of 13 local lenders to renegotiate a $1.2 billion loan collapsed.
Etisalat, with a 45 per cent stake in the Nigerian business, said in June it had been ordered to transfer its shares to a loan trustee after the talks had failed.
CEO of Etisalat International Hatem Dowidar said all UAE shareholders of Etisalat Nigeria, including state-owned investment fund Mubadala, had exited the company and left the board and management.
He said in an interview with Reuters that discussions were ongoing with Etisalat Nigeria to provide technical support, adding that it could continue to use the brand for another three weeks before phasing it out.
"There's a new board and we are not part of that company. We have sent our termination letter for the management agreement," he told Reuters.
Etisalat Nigeria is the biggest foreign-owned victim of dollar shortages plaguing the country due to lower oil prices and economic recession, leaving the company struggling to make repayments to lenders and suppliers.
The telco took-out a $1.2 billion loan with 13 local lenders in 2013 to refinance an existing loan and fund expansion, but struggled to repay four years later.
Dowidar said parent Etisalat had written down the value of the Nigerian business on its books and that transferring its 45 per cent stake to the lenders after loan renegotiation talks collapsed had no impact on the group.
Emerging Markets Telecommunication Services Ltd. (EMTS), trading as Etisalat Nigeria, however said it is aware of recent news reports regarding Etisalat Group’s withdrawal of the right to the continued use of the Etisalat brand in Nigeria by EMTS.
The Vice President (Regulatory and Corporate Affairs) at Etislat Nigeria, Ibrahim Dikko, in a statement explained that EMTS has a valid and subsisting agreement with the Etisalat Group, which entitles EMTS to use the Etisalat brand, notwithstanding the recent changes within the company.
He said: “Indeed, discussions are ongoing between EMTS and Etisalat Group pertaining to the continued use of the brand, and EMTS will issue a formal statement once discussions are concluded. The final outcome on the use of the brand in no way affects the operations of the business as our full range of services remain available to our customers.
“EMTS launched in Nigeria in 2008 with “0809ja” to affirm the “Nigerianness” of our origin and sphere of influence. In our 9 years of operation, we have remained a prime driver and avid supporter of the Nigerian spirit of excellence, and we will continue to stay true to our “Naijacentric identity”. This notion is strongly reflected in our core messages and depicted in major projects and initiatives which we have been known to support. All these initiatives have their foundation embedded in supporting key aspects of the Nigerian fabric: building Nigerian businesses and empowering Nigerian’s with a focus on the youth.
“Nigeria remains the soul of EMTS’ business and we have made the brand alluring to our teeming subscribers who see a piece of the spirit and character of Nigeria in everything we do. EMTS is here to stay and we wish to assure our esteemed customers that our core values of youthfulness, customer-centricity and innovation will remain the pillars on which we operate. We thank our esteemed customers for their abiding faith in us.”