Etisalat may sell Nigeria stake over debt default?

14 Mar 2017

UAE telecoms group Emirates Telecommunications Corporation (Etisalat) could sell its stake in its Nigerian wireless unit, which missed a payment on a USD1.2 billion loan, after the cellco’s debt is restructured, Reuters cites two sources as saying. Last week the Central Bank of Nigeria (CBN) and telecoms regulator the Nigeria Communications Commission (NCC) agreed with local banks to pursue a default deal rather than a receivership for Etisalat Nigeria, to avoid deterring investors and a wider debt crisis. Etisalat is due to meet with creditors in Nigeria this week to discuss the default, the unnamed source said, adding that it was not clear whether the UAE telco, which increased its stake in Nigeria’s fourth largest mobile operator from 40% to 45% after converting a loan to equity in February, would divest completely.

TeleGeography’s GlobalComms Database states that Etisalat signed a USD1.2 billion loan with a consortium of 13 banks in May 2013 to refinance an existing USD650 million loan and to continue its network rollout and modernisation. Ibrahim Dikko, vice president for regulatory affairs at Etisalat Nigeria, said the operator has missed payments due to an economic downturn and currency devaluation in the West African nation, as well as dollar shortages on the country’s interbank market.