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Nairametrics|Talks between telecoms operator Etisalat and the consortium of Nigerian banks has ended in a deadlock. Etisalat held the meeting with a consortium of Nigerian banks in the United Kingdom.
Here is what we know so far;
- Etisalat Nigeria is owing the banks $1.2 billion.
- Etisalat took the loan to refinance an already existing loan and fund expansion of its network. To avoid a banking sector turmoil and a breakdown in investor confidence, the CBN decided to intervene, choosing a debt restructuring over a receivership.
- A tripartite meeting between the CBN, Consortium of banks and Etisalat was immediately setup culminating in this meeting in the UK.
Update from the meeting in the UK
- Etisalat missed payments leading to a meeting between the consortium of banks and Etisalat.
- Reuters reported that Etisalat met with the lenders in London on April 28, in a meeting led by Guaranty Trust Bank
- Banks insist that their preferred option is for Etisalat to get their parent company to inject equity into their Nigerian subsidiary.
- Etisalat Abu Dhabi, which owns 45% in their Nigerian subsidiary, is adamant to inject any more capital considering that it had already written down $50 million
- The on the other hand are unwilling to take more haircut on their loans. Doing so will increase the size of their impairments which are already at a record high. The Central Bank of Nigeria (CBN) has capped impairment sizes to 10% of loan book for banks. An increase beyond that means banks have to either raise capital or cut back on dividend payments.