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CBN Stops Etisalat’s Creditors from Taking over Its Operations – Thisday

HomeNewsCBN Stops Etisalat’s Creditors from Taking over Its Operations – Thisday
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CBN Stops Etisalat’s Creditors from Taking over Its Operations – Thisday
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    Alex Ikechukwu
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By Emma Okonji

The Central Bank of Nigeria (CBN), has halted the plan by a consortium of 13 local banks to take over the operations of Etisalat for failure to continue with the refinancing of the loan that the telecoms company took from the banks in 2013.

The halt on the planned takeover, was the outcome of the meeting held yesterday in Lagos between the CBN, the telecoms company and its creditors.

Etisalat in 2013, took a loan of $1.2 billion (N377 billion) from a consortium of 13 local banks for network expansion and upgrade, but defaulted in the refinancing of the loan, while blaming its inability to refinance the loan on devaluation of naira and scarcity of dollar. 

Disturbed by its inability to continue refinancing of the loan, the 13 banks, on Tuesday, threatened to take over the operations of the telecoms company. 

The Nigerian Communications Commission (NCC), the telecoms industry regulator, had on Thursday, met with CBN on the issue of indebtedness of Etisalat, and at the end of the meeting which was attended by the Executive Vice Chairman of NCC, Prof. Umar Danbatta and the CBN Governor, Mr. Godwin Emefiele, it was agreed that the CBN would invite Etisalat and its creditors to a meeting yesterday (Friday), to further discuss and to find a lasting solution to the indebtedness. 

At the meeting yesterday, reprieve came for Mobile Network Operator as CBN ordered the 13 banks to stop all plans about taking over the operations of the telecoms company 

According to a statement issued by the Director, Public Affairs at NCC, Mr. Tony Ojobo, shortly after the parley, yesterday’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.  

According to the statement, 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,” the statement added.

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

NCC assured Nigerians that it would engage the CBN in a possible  crucial meeting with Etisalat’s shareholders anytime soon. 

Also worried about the situation, the Association of Licensed Telecoms Operators of Nigeria (ALTON), has requested for priority allocation of foreign exchange to telecommunications industry by the Central Bank of Nigeria. 

Chairman of ALTON, Gbenga Adebayo, who issued a statement yesterday on behalf of its members, drew the attention of Danbatta to challenges its members faced in purchasing Foreign Exchange (FX) from interbank market to fulfill obligations to equipment suppliers and foreign vendors. “This situation is adversely impacting our members’ network operations and we would appreciate the Commission’s urgent assistance. The prevailing scarcity of FX has occasioned a situation where the banks are unable to obtain FX for an upward period of six months despite the submission of pre-requisite documentation for such transactions,” Adebayo said. 

ALTON respectfully seeks the indulgence of the EVC to provide background information resulting to the subsisting regime of exempting telecommunications industry from the Central Bank of Nigeria (CBN) intervention window.

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