Three Nigerian banks and their foreign affiliates, yesterday, took over Etisalat Nigeria for allegedly failing to repay a loan of over N541bn it secured from the consortium in 2015.
The Nigerian banks include Guaranty Trust Bank, Access Bank and Zenith Bank. The new development is coming after the telecom regulator, the Nigerian Communications Commission, NCC, tried a couple of times to mediate issues between the telecoms company and the banks without results.
A source at NCC confided revealed that the commission tried its best to ensure the situation didn’t degenerate to taking over of the telecoms company but that pressures from the banks became so intense it had to allow the action.
The source said the issue had lingered for a while, with the NCC believing it could provide some middle ground for both parties to come to a truce but unfortunately the banks feared that inability to recover the loan could expose them to the Asset Management Company of Nigeria, AMCON, which had been demanding immediate cut-down on the rate of their non-performing loans. The loan facility totaling $1.72 billion (about N541.8 billion) involving a foreign-backed guaranty bond, was for Etisalat to turn around its network and expand its operations in Nigeria.
However, the banks claimed that Etisalat had failed to service the debt as agreed since 2016. They subsequently reported Etisalat to the banking sector regulator, the Central Bank of Nigeria, CBN, and its communications sector counterpart, the NCC. Our NCC source disclosed that Etisalat blamed its inability to fulfill its obligation to the banks on the current economic recession in Nigeria.