The Central Bank of Nigeria (CBN) and the Nigeria
Communications Commission (NCC) have declared
their decision to intervene in the Etisalat Nigeria debt
crisis in order to prevent job losses and asset
stripping.

The move was as a result of the deepening crisis
between Etisalat and a consortium of 13 Nigerian
banks over a syndicated loan of about US$1.2 billion
granted the telecom company.

Confirming the intervention of the two regulators in the
loan dispute, Isaac Okorafor, CBN spokesman, said
Etisalat is systemically important to
telecommunications in Nigeria.

“Although it should ordinarily not be the role of a
regulator to decide how individual bad loans are
resolved, the CBN believes that Etisalat is a
systemically important telecommunications company
with over 20 million subscribers that if not well
handled, may have negative implications for the
banking system itself,” he said.

He further explained that the CBN and NCC, sensing
that banks might go ahead in the usual way and
downsize the company’s over 4,000 staff, reached an
agreement to intervene and implore the consortium of
banks to be reassess its position in dealing with
Etisalat.

Okorafor described some media reports insinuating
high-handedness by CBN on the issue as “the height
of mischief and insensitivity” explaining that the
collaborative move by the regulators was aimed at
preventing job losses and asset stripping and to
ensure that Etisalat remains in business and is able to
pay back the loans.

According to him, the Godwin Emefiele-led CBN and
the NCC, in the coming days, will meet with the
syndicate of banks and the IHS Towers, the tower
managers and the equipment suppliers, in order to
achieve what he termed “a win-win outcome” for all
stakeholders.

It will be recalled that Etisalat has been embroiled with
a consortium of 13 Nigerian Banks that gave it a
facility of about US$1.2 billion, on which the company
has been unable to meet its repayment obligations in
line with agreed terms of the facility.

Given the inability of Etisalat to come to an acceptable
agreement with the banks, the largest shareholder in
the company, Dubai-based Mubadala Development
Company of the United Arab Emirates, has now pulled
out of the company as well as the ongoing
negotiations, leaving only their local partners, led by
Hakeem Belo-Osagie, to carry the burden.

It was based on the attempt of the banks to take over
the company that the financial and
telecommunications regulators have moved in to
intervene and forestall down-sizing and asset
stripping.

TheCable