Banks have opposed a proposal by Etisalat Nigeria to convert part of a $1.2 billion loan from dollar to naira.
Etisalat had proposed that the Abu Dhabi telecommunications group and its other shareholders should recapitalise it instead.
A banker, who confided in Reuters, revealed that the seven-year syndicated loan, on which Etisalat missed a payment, has a dollar portion of $235 million, which the firm wants to convert to naira to overcome the hard currency shortages in the Nigeria’s interbank market.
A source at the NCC told The Guardian yesterday that the meeting was shifted due to some unforeseen circumstances.
“It would now be held at an agreed date next week, and will include the CBN, NCC and Etisalat’s shareholders. The major thing for now is that discussions are on-going,” the source said.
It was further learnt that Etisalat is asking the banks to convert the dollar component to naira “but the banks don’t want that option and have told them to talk to their parent body to settle the loan.”
The UAE’s Etisalat owns 45 per cent of Etisalat Nigeria, while Abu Dhabi’s Mubadala owns 40 per cent of the company, which is due to meet its lenders for debt talks mediated by Nigeria’s central bank and the telecoms regulator.
This meeting was proposed after the authorities agreed with the local banks to prevent Etisalat Nigeria, which was not available for comment, going into receivership.
In 2013, Etisalat Nigeria was said to have secured a total of $1.7 billion medium term syndicated loan facility with a consortium of Nigerian banks. The facility included both naira and dollar tranches from a consortium of Nigerian banks.
The loan, which involved a foreign-backed guaranty bond, was for Etisalat to finance a major network rehabilitation and expansion of its operational base in Nigeria.
Sources from the Nigerian affiliate of the Abu Dhabi-listed telecoms firm had given notice to its Nigerian lenders that it would miss a payment on a $1.2 billion loan in February.
Source: The Guardian