Etisalat has been instructed to transfer its 45 percent stake in Etisalat Nigeria to a loan trustee after debt restructuring talks with lenders failed, the Abu Dhabi telecoms company said on Tuesday.
Etisalat Nigeria had been in talks with Nigerian banks to restructure a $1.2 billion loan after missing repayments but those discussions failed to produce an agreement on restructuring the debt, Etisalat said in a statement.
The Nigerian banks include Guaranty Trust Bank, Access Bank, Zenith Bank and Fidelity Bank.
Nigeria’s financial system, hobbled by lower oil prices and economic recession, has suffered shortages in dollars, making it difficult for companies to make the loan repayments.
Etisalat said its had been notified to transfer its stake by June 23. It said the stake had a carrying value of zero on its books.
An Etisalat Nigeria spokesman said the company was still in discussions with lenders to find a “non-disruptive” solution.
Etisalat said its financial exposure to Etisalat Nigeria was related to operational services worth 191 million UAE dirhams ($52 million) and that discussions were ongoing with lenders regarding the use of the Etisalat brand.
Etisalat Nigeria was established in 2005 and it launched one of the first major broadband services in the country – EasyBlaze.
The company is known for its innovative products and services such as the Eco Sim and the first network to offer special numbers to Nigerians as their mobile numbers via the 0809uchoose campaign.
In April 2013, Etisalat Nigeria announced it would invest $500 million to expand its network, enabling further potential market growth of 17%.
In June 2013, it launched the Etisalat Prize for Literature the first pan-African prize for debut published writers.
In October 2016, Etisalat Nigeria Announced 4G LTE With a Frequency Band Of 3 (1800MHz), the speed test results gives 28MBps DownLink and Upload Speed of 11MBPS, the 4G Network is covered currently in some part of Lagos and Abuja.
In March 2017, Nigeria telecoms regulator pushed for talks to halt takeover attempts by Etisalat creditors and reschedule its $1.2 bln loan.