The Central Bank of Nigeria (CBN) has disclosed that Dubai-based investment fund – Mubadala – has pulled out of Etisalat Nigeria after the telecommunications firm failed on Friday to renegotiate a $1.2 billion loan taken out four years ago with 13 Nigerian banks. The CBN made this revelation, during the weekend, in a statement signed and issued to newsmen by its spokesman, Isaac Okorafor.
Although he gave no specific details on what he meant by “pulling out”, Okorafor said the CBN had intervened in the loan renegotiation talks to prevent job losses and asset stripping.
He said representatives from the central bank and the Nigeria Communications Commission (NCC) would continue to hold talks in the next few days with lenders and IHS Towers, the mobile phone tower managers, as well as “equipment suppliers”.
The statement reads in part: “Given the inability of Etisalat (Nigeria) 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.
“It was based on the attempt of the banks to takeover the company that the financial and telecommunications regulators have moved in to intervene and forestall down-sizing and asset stripping,”
In March, the central bank, and the Nigeria Communications Commission (NCC) tried to prevent lenders placing the firm in receivership to avoid a wider debt crisis and agreed with banks to pursue a default deal.
But lenders, under pressure to avoid loan-loss provisions, have been pushing to finalise a restructuring before half-yearly audits this month.
The original loan was a seven-year facility to refinance a $650 million loan and fund expansion of Etisalat Nigeria’s network.
The company missed payments in February after sharp falls in the Nigerian naira bloated the loan’s value, making repayments difficult.
Etisalat is Nigeria’s fourth biggest mobile operator with a 14-percent market share. South Africa’s MTN has 47 percent, Globacom 20 percent and Airtel – a subsidiary of India’s Bharti Airtel – 19 percent of Nigeria’s mobile phone market.
Etisalat Nigeria had repaid $500 million of the loan before it defaulted in February due to a currency devaluation and its only remaining investors are its Nigerian partners, led by company chairman Hakeem Belo-Osagie.
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