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Etisalat Nigeria confident of resolution with banks

Etisalat Nigeria confident of resolution with banks

Senior executive says negotiations regarding repayment of US$1.2bn loan have reached advanced stage.

Ibrahim Dikko, Vice President for Regulatory and Corporate Affairs at Etisalat Nigeria, has confirmed the company would soon reach a final resolution with several banks regarding a US$1.2 billion syndicated loan.

Dikko said, "Etisalat Nigeria can confirm that negotiations with the consortium of banks regarding the syndicated loan agreement signed in 2013 have reached an advanced stage. We are considering a number of options and are not taking anything off the table at this time."

The announcement has been made amid ongoing local media reports that suggest Etisalat Nigeria's majority shareholder, Mubadala Development Company, is to exit the business.

According to The Nation, the banks have issued Etisalat with a final default notice which expired on 31 May and prospective investors are undecided since the banks "flatly rejected" Mubadala's final restructuring plan.

Premium Times reported that Mubadala had pulled out its investment in Etisalat and had exited the Nigerian market – a report that was refuted by Mubadala's spokesperson Brian Lott who told Reuters they are still discussing several proposals.

Dikko said local media reports as premature. "Etisalat Nigeria considers it pertinent to state that parties to the negotiation are considering a number of options and discussions are at an advanced stage regarding the syndicated loan agreement with the banks. It will therefore be presumptive and in bad faith to begin to predict the outcome."

He also affirmed that Etisalat remains a viable business and recorded its best financial year in 2016.

"Parties are keen to ensure that the ongoing discussions and eventual outcome do not affect the day-to-day operations of the business whether now or after the announcement of our agreement. All parties have continually demonstrated an interest in the continued operations of Etisalat as a business as it remains the backbone of millions of small business owners, multinationals, government and indeed Nigerian subscribers in general," the VP said.

The US$1.2 billion loan was secured by Etisalat in 2013 and was used to refinance a US$650 million loan as well as towards network expansion.

However due to dollar shortfall, the company had been unable to meet payment plans which resulted in action by the affected banks, including Zenith Bank, GT Bank, First Bank, UBA, Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank, and Union Bank.

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