Etisalat owes us N40bn – Access Bank

Telecoms network operator Etisalat Nigeria, which is in talks with local banks on renegotiating the terms of a $1.2 billion loan after missing a payment, owes N40 billion ($131 million) to one of the lenders, Access Bank, the Chief Executive Officer, CEO of the bank said on Thursday.

Access’s chief executive Herbert Wigwe said the loan talks were triggered 10-days ago when the company asked lenders to “stand still” on the loan for it to review its operations.

He also said that Etisalat Nigeria’s parent Emirates Telecommunications Group (Etisalat) had converted a loan to the Nigerian company into shares to free up cashflows and was being asked to inject more equity capital.

“Banks are saying we would need an equity injection or commitment to support the business. That is being discussed,” he told an analysts’ call when asked about Access Bank’s loan book.

According to Reuters, Wigwe told the call that the bank was monitoring the level of non-performing loans on its books but the Etisalat loan was classified as “performing” and saw no need to make a provision.

Reuters reports that Etisalat Nigeria accounted for around 3.7 percent of the group’s revenue in 2013 as well as has a mobile market share of 13.3 percent in Nigeria, behind South Africa’s MTN’s, privately held Globacom and Airtel, a subsidiary of India’s Bharti Airtel.

It signed a $1.2 billion medium-term facility with 13 Nigerian banks in 2013, which it used to refinance an existing $650 million loan and fund a modernisation of its network.

But the company missed payments due to the economic downturn in Nigeria, a currency devaluation and the shortage of dollars in the country’s interbank market, Reuters reports.

Wigwe said the discussion was “difficult” and the Emirates Telecommunications Group, which hitherto owned 40 percent of Etisalat Nigeria, had questioned why it needed to import more capital into Nigeria at a time when the economy was facing its first recession in a quarter of a century.

No one at Etisalat was immediately available to comment. Other lenders on the loan deal include: Zenith Bank , GT Bank, First Bank, UBA , Fidelity Bank, Ecobank, FCMB , Stanbic IBTC Bank and Union Bank.