Over the past few weeks, Etisalat has been in the news for its debt crisis which seems to take a different twist by the minute. On Monday 3rd of July 2017, it was announced that the Central Bank of Nigeria (CBN) had finally taken over “highly indebted Etisalat Nigeria Ltd.” This follows the resignation of the company’s Chief Executive Officer (CEO), Mr Matthew Willsher, and Chief Financial Officer (CFO), Mr Wole Obasunloye.

It is also no news that Etisalat United Arab Emirate (UAE) has finally exited Nigeria due to a $1.2 billion medium-term syndicated loan facility from a consortium of 13 banks. This exit and restructuring of the company saw its board members such as the Chairman of the company, Mr Hakeem Belo Osagie resign. The board members have also been replaced immediately and it comprises of Dr Joseph Nnanna as Chairman, Mr Boye Olusanya as Chief Executive Officer and Mrs Funke Ighodaro as Chief Finance Officer.

According to a press release issued by Etisalat, the Consortium of Lenders working with Nigerian Communications Commission regulators and the Central Bank of Nigeria are committed to the ongoing efforts to restructure the company towards a path of long-term success of the business and the appointment of a seasoned board of directors and top management is a testament to this.

The story so far

In 2013, a consortium of about 13 Nigerian banks led by Access Bank, GTB and Zenith Bank gave Etisalat a syndicated loan of $1.3 billion. This loan was expected to help refinance its existing loans and finance its working capital. $650 million was set aside for refinancing and the balance for network expansion.

As of 2016, the company had started defaulting on its loan obligations which led to a few bailouts from its parent company in Abu Dhabi.

In early 2017, it was reported that the consortium of 13 banks, which lent money to the company 4 years ago, had threatened to take over the telco in order for it to recover the money.

CBN along with the Nigerian Communications Commission stepped into the situation to avoid a forced receivership.

The consortium of Nigerian banks later requested that Etisalat UAE, main investor, Mubadala step in with another bailout fund but Mubadala hesitated. Mubadala stressed that Etisalat UAE’s insistence to divest from Etisalat Nigeria was part of its global strategy to reduce its several overseas interests.

Etisalat Nigeria then offered the consortium of Nigerian banks shares in the entity via a debt to equity swap deal, but the consortium of Nigerian banks declined the offer insisting on a bailout.

After several unmet deadlines, the consortium of Nigerian banks again put forward a deadline of June 23rd for the Etisalat Group to come up with a solution or transfer its shares to a trust, which would be managed by an independent trustee.

On June 20, 2017, Etisalat Abu Dhabi announced that it had transferred 70 percent of its holding in Emerging Market Telecommunications Services Ltd (EMTS), comprising of 40 percent of its ordinary shares and 25 percent in preference shares respectively. EMTS is the vehicle used to invest in Nigeria.

There are speculations that apart from Etisalat UAE divesting from Etisalat Nigeria, the company may also withdraw its brand name from the Nigerian entity. This means that Etisalat Nigeria could see its name changed. The shares of the company have also been transferred to United Capital Trust where it will be warehoused until they find a buyer. There are also speculations that Etisalat is talking to a group of private equity investors and the funds raised will be used to repay its loans.


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