Banks’ shareholders push for takeover of Etisalat

Some shareholder groups in the nation’s capital market on Tuesday urged Etisalat Nigeria to settle the N1.2 billion debt it owed 13 commercial banks to avoid  a takeover.

A cross section of the shareholder groups stated this in an interview with the News Agency of Nigeria (NAN) in Lagos on Tuesday.

They insisted that the company must settle the debt for the banks to meet up with their dividend obligations.

Mr Boniface Okezie, National Coordinator, Progressive Shareholders Association of Nigeria, called on Etisalat to settle the debt owed the commercial banks to avoid a legal action.

Okezie said that the affected banks should approach the court for receivership if Etisalat failed to settle the debt.

He stated that the banks had obligations to their shareholders in terms of dividend payment at the end of the financial year, insisting that the debt must be paid.

Also, Mr Godwin Anono, the Chairman of Nigeria Professional Shareholders Association, said that the company should settle the debt and desist from making unnecessary noise about the whole thing.

He said the transaction was in line with customer-bank relationship, noting that terms and conditions must be obeyed.

Anono said further that the shareholders were in support of the banks to acquire the company if it failed to settle the loan.

“This is like any other transaction, it’s not government business and I stand on existing protocol that the banks should acquire the company,’’ he said.

In his view, Mr Sewa Wusu, Head Research, SCM Capital Ltd., said that the issue of loan between Etisalat and the consortium of banks was a customer-bank relationship which ought to be settled amicably with terms agreeable between both parties.

He said that the issue was beginning to elicit concerns in the banking industry given the level of amount involved and its potential impact on the balance sheets of those banks involved.

“But I think, the monetary authority is also involved to ensure prompt settlement of the situation among the parties,’’ he said.

Etisalat, on June 20, said it had been instructed to transfer its 45 per cent stake in Etisalat Nigeria to a loan trustee.

It said it had been notified to transfer its stake by June 23, saying that the stake had a carrying value of zero on its books.

However, in the last few months, Etisalat Nigeria has been in talks with Nigerian banks to restructure a 1.2 billion-dollar loan after missing repayments.

The loan is a seven-year facility agreed with 13 banks in 2013 to refinance a 650 million-dollar loan and fund expansion of its network.

Although the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria stepped into the fray to prevent a takeover by the banks, those discussions failed to produce an agreement on restructuring the debt.