Embattled mobile telephone operator, Etisalat Nigeria, on Thursday denied a news report that the company was being investigated by the anti-graft agency, the Economic and Financial Crimes Commission, EFCC, following a petition by the consortium of banks requesting the Federal Government to look into how the funds from the syndicated loans were utilized.
In a statement signed by Ibrahim Dikko VP, Regulatory & Corporate Affairs, Etisalat Nigeria and made available to P.M.EXPRESS stated that the telco has consistently and conscientiously met up with its payment obligations with about 42 per cent (about $504 million) of the original loan package of $1.2 billion (about N377.4 billion) from a consortium of Nigerian banks, which is at the core of the current crisis it is facing, has since been repaid.
“The attention of Etisalat Nigeria has been drawn to media reports that the management of Etisalat Nigeria is being investigated by the Economic and Financial Crimes Commission (EFCC), following a petition to “the Federal Government asking that Etisalat be investigated” on how the funds from the syndicated loans were utilized, Etisalat wishes to categorically affirm for the avoidance of doubt that the reports are patently false and most unfortunate considering the damage such misleading information can have not only on our business, but indeed on the telecommunications industry and the country as a whole,” Dikko stated.
According to him, “As at today, we can categorically state that the outstanding loan sum to the consortium stands at $227 million and N113 billion, a total of about $574 million if the naira portion is converted to US Dollars. This in essence means almost half of the original loan of $1.2 billion, has been repaid. Etisalat continued to service the loan up until February 2017, when discussions with the banks regarding the repayment restructuring commenced.
“A simple interrogation of the rigorous process for securing a syndicated loan from a consortium of reputable banks would have exposed the truth to the original writer of this story and other media channels who have subsequently re-circulated the falsehood without interrogation or verification. Concerned parties have access to our books and do not require an investigation into how the loan sum was utilized.
Dikko stated that all of the infrastructure investment and services for which the loan was secured, were paid through the telco’s banks and they are verifiable.
In 2013, Etisalat Nigeria had obtained the $1.2 billion syndicated loan, a medium-term seven-year facility, from a consortium of 13 Nigerian banks, including Access Bank, Zenith Bank Plc, Guaranty Trust Bank Plc, First Bank Limited, Fidelity Bank Plc, First City Monument Bank (FCMB), Stanbic IBTC, Ecobank, United Bank for Africa (UBA) Plc and Union Bank of Nigeria Plc.
The loan, which involved a foreign-backed guaranteed bond, was to help the telecommunication firm finance a major network rehabilitation, upgrade and expansion of its operational base in Nigeria, and improving the quality of service on its network.
However, the economic downturn of 2015 and sharp devaluations of the naira, according to the company, negatively impacted on the dollar-denominated loan by driving up the loan value, thus prompting Etisalat to request a loan restructuring from the consortium of banks.
The company’s alleged failure to meet agreed debt servicing obligations with the 13 banks since 2016 was said to have triggered a major crisis, culminated in the withdrawal of its major shareholder, Emirates Telecommunications Group Company from the company last week.
The United Arab Emirates company announced to the Abu Dhabi Securities Exchange in Abu Dhabi on Tuesday that it had decided to request Emerging Markets Telecommunications Services, EMTS Holding BV, a special purpose vehicle established in Netherlands, to transfer the entire 70 per cent of its shareholding in Etisalat Nigeria to United Capital Trustees Limited, the legal trustees of the banks effective June 15, 2017.
Etisalat Nigeria is currently left in the hands of EMTS promoted by the former Chairman of United Bank for Africa (UBA), Hakeem Belo-Osagie.