Etisalat not under investigation, 42% of original loan repaid

By Kokumo Goodie, Lagos, Nigeria

Etisalat has said it is not under any investigation by the Economic and Financial Crimes Commission (EFCC).

In a statement, the telco said: “The attention of Etisalat Nigeria has been drawn to media reports that the management of Etisalat Nigeria is being investigated by the EFCC, following a petition to “the Federal Government asking that Etisalat be investigated” on how the funds from the syndicated loans were utilised.

“Etisalat wishes to categorically affirm for the avoidance of doubt that the reports are patently false and most unfortunate considering the damage such misleading information can have not only on our business, but indeed on the telecoms industry and the country as a whole. A simple interrogation of the rigorous process for securing a syndicated loan from a consortium of reputable banks would have exposed the truth to the original writer of this story and other media channels who have subsequently re-circulated the falsehood without interrogation or verification.

“Concerned parties have access to our books and do not require an investigation into how the loan sum was utilised. All of the infrastructure investment and services for which the loan was secured, were paid through our banks and these are verifiable.”

The statement said it is indeed crucial for the media to correctly inform the general public by providing the needful macro-economic context around which the challenges we encountered with meeting up with the loan obligation occurred. It would be recalled that the $1.2billion loan, a medium-term seven-year facility, was obtained by Etisalat Nigeria for the purpose of expanding its network and improving the quality of service on its network. The economic downturn of 2015 and sharp devaluations of the naira negatively impacted on the dollar-denominated loan by driving up the loan value, thus prompting Etisalat to request a loan restructuring from the consortium of banks.

“Contrary to the widely reported misrepresentations about Etisalat Nigeria’s debt obligation to the consortium of 13 banks, it has become pertinent to set the records straight. Prior to this time, Etisalat had in fact consistently and conscientiously met up with its payment obligations. As at today, we can categorically state that the outstanding loan sum to the consortium stands at $227million and N113billion, a total of about $574million if the naira portion is converted to US Dollars.   This in essence means almost half of the original loan of $1.2billionn, has been repaid. Etisalat continued to service the loan up until February 2017, when discussions with the banks regarding the repayment restructuring commenced.

“We hereby appeal to our media partners to continue to uphold the ethics of the profession by exercising some restraint particularly in the publication of such misleading and damaging information. We have been accessible and remain available to the media to clarify or verify information when required.

Etisalat, Nigeria’s fourth largest mobile network, had transferred control of the company to a consortium of banks after failed debt repayment talks.

The banks, which include Access Bank, Zenith Bank Plc, Guaranty Trust Bank Plc, FirstBank Limited, Fidelity Bank Plc, First City Monument Bank (FCMB), Stanbic IBTC, EcoBank, United Bank for Africa (UBA) Plc and Union Bank of Nigeria Plc, among others, said they would take over Etisalat’s operations through its legal representative, United Capital Trustees.

But if the banks think the take-over of the telco will be tea party, the Nigerian Communications Commission (NCC) said all the legal provisions must be followed.

Tony Ojobo, director, public affairs, NCC, assured customers of the network that it would do everything within its powers to ensure that they continue to enjoy services provided by the operator.

“The attention of the commission has been drawn to the planned takeover of Etisalat by a consortium of banks.

“As a result of this planned action, the commission wishes to state that it is aware of the indebtedness of Etisalat to the consortium of banks.

“In conjunction with the Central Bank of Nigeria (CBN), we mediated by holding several meetings with the banks, Etisalat and other stakeholders with a view to finding a resolution. Regrettably these meetings did not yield the desired results.

“The NCC wishes to reassure the over 21 million Etisalat subscribers that it will do all within its regulatory power to ensure that Etisalat subscribers continue to enjoy the services provided by the operator.

“The commission has taken proactive steps to cushion the impact of the takeover, this is without prejudice to the ongoing effort between Etisalat and the banks towards a negotiated settlement.

“In view of the recent development, NCC wishes to reassure all stakeholders in the telecommunications sector, and in particular the subscribers on the Etisalat network that the commission will ensure that the integrity of Etisalat Network is not compromised.

“Accordingly, the commission has drawn the attention of the banks to provisions of the Nigerian Communications Act (NCA) 2003 Section 38: Sub section 1 – The grant of a licence shall be personal to the licensee and the licence shall not be operated by, assigned, sub licensed or transferred to another party unless the prior written approval of the commission has been granted;

“Sub section 2 – A licensee shall at all times comply by the terms and conditions of the license and the provision of this Act and its subsidiary legislation.”

Of the three core investors in Etisalat Nigeria – Mubadala Development Company, UAE; Emirates Telecommunications Group Company (Etisalat Group), Abu Dhabi; and Emerging Markets Telecommunications Services (EMTS), the local arm of Etisalat Nigeria – only Mubadala has announced its intention to pull out of the company.

Mubadala owns 40% of the equity in Etisalat Nigeria, Emirates Telecoms Group owns 45% and EMTS holds 15%.

“Accordingly, the company received a default and security Enforcement Notice on June 9, 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 per cent 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 p.m. Lagos time on 23 June 2017.”

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