Etisalat Nigeria locked in talks with banks over $1.2bn refinancing deal

James Pearce
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The company’s biggest shareholder Mubadala Investment Company said talks between regulators, stakeholders and financiers are ongoing

Etisalat Nigeria has been locked in talks with Nigerian banks over the refinancing of a $1.2 billion bank loan, according to the company’s biggest shareholder Mubadala Investment Company.

The telecoms company, which is 45% owned by Mubadala, has faced difficulties meeting commitments on the 2013 loan, according to reports in Nigeria.

The loan was arranged by a syndicate of 13 local banks in 2013 and declared in default this past March following two severe devaluations of Nigeria’s currency, the naira. It was in part taken out to refinance an earlier loan, taken out in 2011, for $650 million used for its 2G and 3G rollout.

The 13 local banks involved in the loan deal include: Zenith Bank, GT Bank, First Bank, UBA, Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank, and Union Bank.

The National cites an unnamed Mubadala official who said there is ongoing discussions between stakeholders, regulators and the financial institutions.

"Etisalat Nigeria remains in ongoing discussions with all stakeholders, including government regulators and its syndicated finance facility lenders," according to a Mubadala official.

"The focus of these discussions is the company’s capital structure and ongoing capital requirements.”

Etisalat Nigeria, which is 40% owned by Etisalat group, is Nigeria’s fourth biggest mobile provider, with around 20 million subscribers.

Mubadala initially acquired a licence to operate as a telecoms provider in Nigeria in 2007, bringing in Etisalat the following year. The remaining 15% of the company is owned by MyaCynth, an investment company ran by Etisalat Nigeria chairman Hakeem Belo-Osagie.

Reports last week, denied by Etisalat Nigeria, had claimed that Mubadala was considering exiting the business.

The Nation Online reported that, in a statement, Ibrahim Dikko, VP of regulatory & corporate affairs for Etisalat Nigeria, said: “Whilst it is premature at this stage of the ongoing discussion to affirm that this is the conclusive option, Etisalat Nigeria considers it pertinent to state that parties in the negotiation are considering a number of options and discussions are at an advanced stage regarding the syndicated loan agreement with the banks. It will therefore be presumptive and in bad faith to begin to predict the outcome.

“Can confirm that negotiations with the consortium of banks regarding the syndicated loan agreement signed in 2013 have reached an advanced stage. As noted in an earlier statement, we are considering a number of options and are not taking anything off the table at this time.”