CBN, NCC RUSH TO RESCUE ETISALAT; AMCON ON THE SIDELINES

GODWIN EMEFEILE, CBN BOSS

With recession in Nigeria, comes challenges, pains and uncertainty as many businesses will be forced to go under the hammer, if the Assets Management Company of Nigeria, AMCON plays its statutory roles.

Certainly, these are not the best of times for Nigeria's smallest mobile carrier; Etisalat.

Recall that we reported that the operator may be forced to declare bankruptcy and or be taken over because of bad debts.

Etisalat can now heave a momentary sigh of relief as the Nigerian Communications Commission (NCC) and Central Bank of Nigeria (CBN) have stepped in to negotiate a suspension of the company's imminent takeover.

This was announced on Friday via the NCC’s official Facebook page. Below is the official statement signed by the company's Director of Public Affairs, Tony Ojobo:

Reprieve came for Mobile Network Operator, Etisalat on Friday following a meeting convened by financial regulator, Central Bank of Nigeria, CBN and telecom regulator, Nigerian Communications Commission, NCC to find a quick resolution to the loan default crisis facing the company.

Friday’s meeting succeeded in halting the attempt by Etisalat’s creditors at bringing it under any form of take over. Receivership was completely taken off the table in a meeting that was very productive and constructive.

The meeting, which held at the CBN Office in Lagos, had the consortium of banks being owed and Etisalat in attendance. The banks and the mobile network operator agreed to concrete actions that will bring all parties closest to a resolution.

The CBN and NCC were able to secure for Etisalat the necessary oxygen to enable it continue to meet urgent operational expenses.

CBN Governor, Mr Godwin Emefiele who chaired the meeting, was firm in declaring what needed to be done by both parties towards a quick resolution. The NCC equally made it clear everything necessary must be done to protect the 23 million Etisalat subscribers and also protect the telecom industry to prevent potential investors from developing cold feet.

Meanwhile, in a renewed effort to ensure that Etisalat remains in business while the consortium of banks meet their obligations to their customers, a meeting will hold on March 16 to agree on a payment restructuring path going forward.

The NCC will lead the CBN in a possible crucial meeting with Etisalat’s shareholders anytime soon.

According to sources, Etisalat obtained loans — amounting to $1.72 billion — from a consortium of foreign and Nigerian banks in 2015 to facilitate reconstruction and expansion of Etisalat’s network operations here in Nigeria.

The banks claimed that they are being pressured by Assets Management Company of Nigeria (AMCON) to reclaim the loan by all means.

According to the unidentified NCC officials, the NCC as the regulatory body for telecoms in Nigeria, has tried best possible means, interacting with the Central Bank of Nigeria (CBN) to see that the banks would not have the right to take over. However, as of Tuesday, the NCC approved the takeover, which will occur today.

An unidentified Etisalat official blames their inability to pay back the incurred loan on the current recession in Nigeria. The banks said to be involved in the takeover are Access Bank, Guaranty Trust Bank and Zenith Bank.

What does this mean for Etisalat Nigeria?

Etisalat Nigeria is a subsidiary of Etisalat, a multinational United Arab Emirate-based telecommunications services provider, which operates in about seventeen countries, in Asia, Africa and the Middle East.

There are certain rights that parent companies have over their subsidiary companies, and before a takeover can ensue, these rights will have to be examined.

However, with this takeover, does this mean that Etisalat Nigeria is no longer under the protection of her parent company in UAE? And what will be the fate of the employees and subscribers with this acquisition?

THE SHEET