Etisalat says Nigeria banks to take over Nigeria unit

Etisalat said a Nigerian bank syndicate will take over the Nigerian unit it owns with Mubadala Investment Company and a local partner, after the parties failed to reach a deal over a debt restructuring.

The banks had declared default on a US$1.2 billion loan in March and had resisted taking a “haircut” so that the company could continue to operate without a further substantial injection of capital.

The loan has a US dollar component and the terms turned against Etisalat Nigeria when the Nigerian currency, the naira, was severely devalued over the last two years.

In an announcement via the Abu Dhabi Securities Exchange on Tuesday morning, Etisalat chief financial officer Serkan Okandan said the syndicate had set a June 25th deadline for transfer of ownership of Etisalat Nigeria shares.

It said that discussions between Emerging Markets Telecommunications Ltd., which is the holding company for the Etisalat Nigeria stake, and the Nigerian bank syndicate “did not produce an agreement on a debt restructuring plan.”

Etisalat said it will make a further announcement if there is any change in the situation.

Etisalat Nigeria is 45 per cent owned by Mubadala, an Abu Dhabi government-owned strategic investment company, 40 per cent owned by Etisalat and 15 per cent owned by MyaCynth, an investment vehicle controlled by Hakeem Belo-Osagie, a Nigerian businessman who serves as chairman of Etisalat Nigeria.

Etisalat said it has already written down its Nigerian unit investment to nil and has remaining exposure of Dh191m through agreements to provide services such as international roaming. It has seconded Matthew Willsher three years ago to act as the company's chief executive. Etisalat didn't say if Mr. Willsher would leave the company.