Etisalat Nigeria has confirmed that discussions remain ongoing with its lenders regarding existing obligations under the syndicated loan agreement signed in 2013, adding that it has not received any formal communication from the lenders regarding the proposal.
The telco noted that it is yet to receive a formal communication with regards the proposal. “We cannot confirm this as true as no formal communication has been received from the banks regarding the proposal,” read an official statement from the telecom company.
Etisalat has so far held robust discussions with lenders in good faith, stating that it hopes all areas of discord will be resolved in due course.
Media outlets reported in March that the telecommunication company got a $1.2 billion medium-term syndicated loan facility from 13 banks. These banks include First Bank, Zenith, Guaranty Trust Bank, United Bank of Africa Plc, Fidelity Bank Plc and Access Bank. The loan was obtained to refinance an existing commercial medium-term debt of $650 million and continue its network roll out across the country.
The syndicate of lenders are reportedly keen on finalizing a debt restructuring plan to avoid loan-loss, particularly with the current harsh market conditions and the susceptibility of the sector to record greater Non-Performing Loans as seen in 2016.
In the past year, Non-Performing Loans (NPLs) in Nigeria grew to 14 percent, from 5.3 percent recorded in 2015. As a result of this, local banks are resolute on avoiding NPLs loan growth in order to preserve capital in face of currency instability and weak economic indices. “Indeed the current economic challenges have occasioned untold hardship on the telecom industry as a whole, thus requiring a major shift in position by all affected parties” Etisalat explained.
“We continue to explore all available options to pull through this phase. We will continue to engage all relevant parties in earnest with a view to securing a mutually agreeable outcome.”
Etisalat remains the fourth largest telecommunications firm operating in Nigeria, holding 14 percent of the total market share.