Senate probes Etisalat’s $1.2bn loan
Moves to avert economic shock
Olufemi Samuel, Abuja
The $1.2 billion debt crisis rocking Etisalat Nigeria took the attention of the Senate on Tuesday as it resolves to investigate the management and utilization of the loan facility obtained from the 13 Nigerian banks by the telecommunications’ company.
The Senate Committees on Banking; Communications; Capital Market, and National Security and Intelligence are to anchor the investigations according to plan.
The essence of the probe, according to the Senate, is to prevent future similar recurrence; and also urged the relevant Financial Intelligence Agencies to investigate the management of Etisalat Nigeria and hold the defaulting parties accountable for their actions.
The Senate took this stance following a motion moved by Senator Adeola Olamilekan’s (APC, Lagos West), calling for probe of the debt crises bedeviling Etisalat.
Olamilekan recalled that the syndicated loan was acquired in 2013 as a medium-term seven-year facility to fund expansion of the network from a consortium of 13 banks in the country.
According to him, the Etisalat ownership comprises three shareholders, the United Arab Emirates Sovereign Wealth Fund through Mubadala Development Company, Abu Dhabi (45%), Emirates Telecommunications Group Company (40%) and Myacinth (15%) through Emerging Markets Telecommunications’ Services; He noted that, “As of 2016, the company had started defaulting on its $1.2billion loan obligations leading to a few bailouts from its Parent Company in Abu Dhabi.”
“Understands that only about 42% of the loan has been repaid, remaining an outstanding debt of $696 million representing 58% of its Capital, which Etisalat has failed to service since 2016.” He added, “Since this year, the banks have been moving to take over the telecommunication company in order to recover their funds.”
The Senator stressed the need for Nigerian business environment to be protected and insulated from all forms of fraudulent dealings in order to advance the government’s drive towards promotion of genuine investments in the country just as he noted that the Nigerian Communications Commission, NCC and the Central Bank of Nigeria, CBN have intervened and raised issues of regulatory compliances in trying to prevent a takeover by the banks, but the intervention has failed to produce an agreement on the debt restructuring.
He observes that all UAE shareholders of Etisalat Nigeria, including state-owned investment fund Mubadala, had exited the company coupled with the resignation of top key management officers of the company, the Chief Executive Officer Mr. Matthew Willsher, Chief Financial Officer Mr. Wole Obasunloye, Director and the 3rd shareholder/partner, Mr. Hakeem Belo Osagie.
He also pointed out that although it should not be the duty of the Senate to wade into individual debt crisis of private sector businesses; he was convinced that if this situation is not properly handled, it will have negative implications for the Nigerian business environment and on foreign investments in the country as a whole.
He expressed regrets that, “A loan of this magnitude has the capacity of setting off another banking crisis in Nigeria, with banks looking for bailout funds once again.” In his remarks, the Senate President, Dr. Bukola Saraki, said corporate governance needed to be strengthened by legislations to prevent any future similar recurrence and urged the joint committees to discharge the assignment creditably and on time.
