Etisalat Loan Crisis - CBN Stops Banks From Taking Over Telecom Company

Etisalat Loan Crisis - CBN Stops Banks From Taking Over Telecom Company

Central Bank of Nigeria intervenes in Etisalat loan crisis. Following their intervention in the Etisalat N541.8B loan crisis with 13 banks, the apex bank has stopped the banks from taking over the telecom company. The banks' plans to take over the fourth largest telecommunication company was halted yesterday, Friday, March 10, in a meeting held in Lagos between the Central bank of Nigeria, the Nigerian Communications Commission and the parties.

Etisalat in a bid to expand and upgrade its network in 2015, had taken a loan of N541B from a consortium of 13 foreign and Nigerian banks but failed in the refinancing of the loan citing devaluation of Naira and scarcity of dollar as reasons for its inability to service the loan. This excuse compelled the banks to plan a take-over of the fourth largest telecommunication network in Nigeria.

According to Business Insider, the Central Bank of Nigeria and the NCC waded into the issue as the CBN Governor, Godwin Emefiele and Executive Vice Chairman of NCC Umaru Danbatta called for a meeting on Thursday 9 to find ways around the debacle and proffer a solution that would be beneficial to all parties. Both regulators, therefore, decided to invite the management of Etisalat and the consortium of banks for a round-table meeting on Friday, March 11.

Interestingly, reprieve came for Etisalat at the meeting held at Lagos office of the CBN as the CBN Governor, Godwin Emefiele ordered the 13 banks to stop their plans to take over the mobile network operations. In a statement issued by the Director, Public Affairs at NCC, Mr. Tony Ojobo after the meeting, it was stated that the meeting succeeded in stopping the creditors attempt to bring Etisalat under any form of takeover.

The statement further states:

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”

Nigerian Banks among the consortium of Banks include Zenith Bank, Access Bank, and Guaranty Trust Bank. However, to enable Etisalat remain in business while the consortium of banks fulfill their obligations to their customers, another meeting has been scheduled for March 16 to agree on a payment restructuring path.

Source: Business Insider
Etisalat Loan Crisis - CBN Stops Banks From Taking Over Telecom Company Etisalat Loan Crisis - CBN Stops Banks From Taking Over Telecom Company Reviewed by Exlink Lodge on Saturday, March 11, 2017 Rating: 5

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