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Market Digest Nigeria

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Etisalat Nigeria CEO, Matthew Willsher, CFO Wole Obasunloye resign

Etisalat Nigeria chief executive officer (CEO), Mr. Matthew Willsher, and chief financial officer (CFO), Mr. Wole Obasunloye, on Monday resigned their appointments.

Their resignation came a few days after its Emirati non-executive directors (NEDs), representing the interests of Mubadala Development Company and Emirates Telecoms Group Company (Etisalat Group) also stepped down from the board, following the Nigerian company’s inability to meet its loan repayments amounting to $1.2 billion to 13 Nigerian banks. Chairman of Etisalat Nigeria, Hakeem Belo-Osagie had resigned last Friday. Trouble started when Etisalat Group disclosed on the Abu Dhabi Stock Exchange two weeks ago that it had pulled out of Etisalat Nigeria and was transferring 45 per cent of its stake and 25 per cent of its preference shares in its Nigerian subsidiary to United Capital Trustees Limited, the legal representative of the lending banks.

Aside Etisalat Group, other shareholders of Etisalat Nigeria include Mubadala Development Company with a 40 per cent stake and Emerging Markets Telecommunications Services (EMTS), representing the Nigerian shareholders, with 15 per cent. Etisalat had in 2013 approached a consortium of 13 local banks for a loan of $1.2 billion for network upgrade and expansion. The money was sourced in dollar and naira denominations. However, citing the economic downturn of 2015-2016 and naira devaluation, which negatively impacted on the dollar-denominated component of the loan, Etisalat wrote its creditors informing them of its intention to halt the repayment of the loan in instalments, until such a time that it was able to raise more money. The banks involved in the loan deal are: Zenith Bank, GTBank, FirstBank, UBA, Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank.

Zenith Bank has the highest exposure to Etisalat amounting to $262 million and N80 billion, GTBank has the second highest exposure of $138 million and N42 billion, Access Bank follows with $131 million and N40 billion. Etisalat also owes UBA $125 million and N38 billion; FirstBank – $79 million and N24 billion; Fidelity Bank – $56 million and N17 billion; Stanbic IBTC – $25 million and N7.5 billion; FCMB – $15 million and N4.5 billion; and Ecobank – $10 million and N3.1 billion. But Etisalat, in a statement two weeks ago, had countered this information, stating that it had paid $500 million up till February 2017. It said the outstanding loan to the lenders stands at $227 million and N113 billion, a total of about $574 million if the naira portion is converted to US dollars. In their argument, bank officials insist they had financed the importation and purchase of the towers through Huawei of China to help build the infrastructure backbone for Etisalat and that when the company earned foreign currencies from the sale, it failed to repay its US dollar loans as was done by other telcos like MTN and Airtel. However, banks resolve to take over the firm and pursue the prosecution of Etisalat’s directors, was halted by the Nigerian Communications Commission (NCC), which made it clear that its licence was not transferable without its approval.

The position was backed by the Central Bank of Nigeria (CBN).

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