Etisalat’s $1.2b loan: Why consortium of banks wants FG to investigate usage

Following the recent announcement by the Etisalat Group that it has pulled out of Nigeria, strong indications emerged on Wednesday that the consortium of 13 banks, including Access Bank Plc, involved in Etisalat Nigeria’s 1.2 billion dollars loan is calling on the Federal Government to investigate how the loan was utilised.

A source close to the banks, told journalists in Lagos that the banks want the government, through the Economic and Financial Crimes Commission (EFCC) to wade into the matter by investigating what the company did with the loan.

The source, who alleged that the loans were siphoned, added that there was the need for it to be investigated by the EFCC, noting that there was no proof of what the company did with the loan.

He said that the affected banks had rolled out a lot of viable options to Etisalat for the loan to be restructured, but this was rejected by the company.

The source stated that the banks were not into telecommunications and had no intention of running Etisalat.

“All we want is to recover the loans; we cannot write off the loans as being demanded by Etisalat, because the company is viable,” the source added.

The source said that Etisalat wanted the banks to write off the loan as non-performing, which was rejected because, the company was doing well.

According to the source, the company wants injection of new capital, and this has been suggested to the majority shareholder.

The source called on the government to investigate the matter with all seriousness, to dig out the truth.
UAE’s Etisalat, on June 20, said that it had been instructed to transfer its 45 per cent stake in Etisalat Nigeria to a loan trustee.

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

Recall that in the last three months, Etisalat Nigeria, had been in talks with the consortium of banks, to restructure a 1.2b dollar loan, after missing repayments. The loan was a seven-year facility, agreed with 13 banks in 2013, to refinance a 650 million dollar-loan, and fund expansion of the telecommunications network.

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