In an attempt to absolve themselves of criminal and civil
liability for the non-payment of a $1.2 billion loan taken from 13 Nigerian
banks, the directors of Etisalat Nigeria, save for its chairman, Hakeem
Belo-Osagie, have resigned en masse from the seven-man board of the network
operator.
According to sources close to Etisalat, the six Mubadala
and Etisalat Group-appointed Non-executive Directors (NEDs), all nationals of
the United Arab Emirates, resigned last week, following Emirates Telecoms Group
Company’s (Etisalat Group) reporting disclosure on the Abu Dhabi Stock Exchange
that it 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.
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.
The consortium of banks had threatened to takeover the
operations of the telecoms company, unless it repaid the loan in full.
One source who was aware of the directors’ resignation
informed THISDAY that they stepped down from the board intentionally in an
attempt to exonerate themselves from the liability of the debt default that has
enveloped Etisalat Nigeria, but said the banks will not allow them to go
scot-free.
He explained that what the directors forgot is that they
had used a Dutch-registered company, of which they are also the directors, to
guaranty the loans from the banks, and as such cannot run away from their
obligations to their Nigerian lenders.
“Yes, they resigned because they are trying to absolve
themselves of the loans they have left behind.
“But they cannot run away because they had used a company
registered in the Netherlands where they are directors to guaranty the loans,
so they will still be held liable should Etisalat Nigeria fail to repay the
loans to the banks,” he said.
He also disclosed that the only NED left on the board was
the chairman, Belo-Osagie, clarifying that the Chief Executive Officer of
Etisalat Nigeria, Mr. Matthew Wilshire, Chief Financial Officer, Chief
Information Officer and Chief Commercial Officer are not directors of the
company.
But as the crisis in Etisalat assumes a new dimension,
THISDAY also learnt that the Nigerian Communications Commission (NCC) and the
Central Bank of Nigeria (CBN) have summoned a meeting, inviting the 13 banks,
equipment suppliers and IHS, a telecoms tower and infrastructure provider, for
a meeting friday.
They are slated to meet with NCC and CBN in Abuja to
address the situation in order to stem value erosion of the network provider
and job losses.
The banks, said a source, are also keen on reaching a resolution,
as they would rather not appoint a receiver manager for Etisalat Nigeria.
Right now, the noose is being tightened around Etislat’s
neck to repay the loan, with shareholder groups in the capital market advising
the firm to settle the debt, even as the banks are insisting on the prosecution
of the foreign directors of the company and its principal, Mubadala.
The banks claim that the Mubadala-appointed CFO of
Etisalat Nigeria diverted over $700,000 from the proceeds of the sale of its
towers to IHS.
According to bank officials, they had financed the import
and purchase of the towers through Huawei of China to help build the
infrastructure backbone for Etisalat.
But when the telco earned foreign currencies from the
sale, it failed to repay its USD loans as was done by other telcos like MTN and
Airtel.
The shareholder groups are equally insisting that
Etisalat must settle its indebtedness to the banks, so that the lenders in turn
can pay dividends to their shareholders
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 components.
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 installment repayment of the loan, until such a time that
it was able to raise more money.
Unsatisfied with the excuse from Etisalat, the banks
threatened to takeover the operations of the telecoms company should it fail to
meet its payment obligations.
The situation forced Etisalat to enter into negotiations
with the banks, seeking unreasonable write-offs, which the banks have so far
rejected.
The impasse eventually led to Etisalat Group’s withdrawal
from its Nigerian operations last week, leaving behind Mubadala and EMTS.
C- THISDAY
No comments:
Post a Comment