Premium Times is reporting that three Nigerian banks are set to take over telecommunications firm Etisalat today, Wednesday, March 8, over unpaid N541.8billion debt.
According to the report, the move follows the failure of the Nigerian Communication Commission (NCC) to broker a peaceful resolution between Etisalat Nigeria and a consortium of banks.
The banks involved are:
Guaranty Trust Bank
Access Bank
Zenith Bank
However, these are not the only banks as there are also some foreign banks that have also been reportedly having a running battle with the telecoms company over the loan facility totalling $1.72 billion (about N541.8 billion) and was obtained in 2015.
Etisalat blamed its inability to fulfil its obligation to the banks on the current economic recession in Nigeria…
My afterthoughts:
Was it the increase in FX rate that caused their inability to service the dollar denominated loans ?
Is there a link between their subscriber base and income? Etisalat has over 21 million subscribers
Etisalat once reduced their data charges before later increasing it again (which made them lose someone like me as a data subscriber). Could this may have had either positive or negative effect on their sales/income?
I think Etisalat has just seen the reality in Nigeria’s telecoms market.
People familiar with the matter says the company has not generated profit since it started business in 2008.
There are also allegations of fraud and mismanagement rampant in the company. The problem with Nigerian companies is not just the bad economy but mismanagement across all levels.
They took money they havent paid back, they rake in billions forget story…Lenders have come calling either convert to Equity or Bye bye.
Operating at a loss since 2008 sir, i doubt…i was heavily involved in the Telecom sector haven worked with Airtel, Etisalat and MTN, the 500 billion naira should have been repaid by now, its gross mismanagement.
Nothing like mismanagement. They want to repay the loan just not at current exchange rates. The hassle is over the exchange rate and whether CBN will provide. Or do you want them to pay back at 3 times the amount they borrowed the money? Its not a cashflow problem.
Lol, bro come on, u borrowed 1.2 billion dollars ur asked to payback ur saying exchange rate, the fact is the deal has been there since 08, xchange rate was not a problem then why didnt they pay?, its basically management trying to be smart but the lenders arent budging and can and have every necessary right to ask for their money.
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?