Negotiations between Etisalat Nigeria, the local mobile unit of UAE telecoms group Emirates Telecommunications Corporation (Etisalat), and its lenders on a deal to restructure a USD1.2 billion loan have stalled, two sources with knowledge of the matter told Reuters. Etisalat signed the loan with a consortium of 13 banks in May 2013 to refinance an existing USD650 million facility and to continue its network rollout and modernisation, but earlier this year the operator missed a payment due to an economic downturn and currency devaluation in the West African nation, as well as dollar shortages on the country’s interbank market.
According to the sources, Etisalat met with the lenders led by Guaranty Trust Bank, but they could not agree on a debt restructuring proposal. ‘There is no conclusive view on the way forward … The most viable solution which the banks are pushing for is for the shareholders to inject equity into the business,’ an unnamed banker was quoted as saying. However, a source at Etisalat, which owns a 45% stake in the Nigerian cellco, said the company was not willing to invest more after converting some loans it made to the affiliate to equity and writing down its investment to USD50 million.