By CHIMA AKWAJA, Lagos and NKECHI ISAAC, Abuja
Emerging Markets Telecommunication Services Limited, trading as Etisalat Nigeria, yesterday commenced restructuring with changes to its shareholding as a consortium of banks led by the Access Bank Plc under the name United Capital Trustees Limited emerged majority shareholders of the telecom operator.
This followed the failure of Etisalat to offset the remainder of the $1.2 billion syndicated loan granted it to expand its operations few years ago.Consequently, the takeover agreement stipulates that EMTS Holding BV, established in the Netherlands, has up to June 23 to complete the transfer of 100 per cent of the company’s shares in Etisalat to the United Capital Trustees Limited appointed as the legal representative of the consortium of banks.
Emerging Markets Telecommunication Services Limited is owned by Mubada 40 per cent, Etisalat Group 30 per cent and the remaining 30 per cent is owned by Nigerian shareholders led by Mr. Bello Hakeem-Osagie, the chairman of Etisalat Nigeria.
Etisalat Group, the parent company of Etisalat Nigeria, announced the takeover officially yesterday in a corporate disclosure filed to the Abu Dhabi Securities Exchange in Abu Dhabi, United Arab Emirate.
The filing, with reference number Ho/GCFO/152/85, dated June 20, 2017 signed by Etisalat Group Chief Financial Officber, Serkan Okandan, stated that efforts by EMTS to restructure the repayment of the syndicated loan by a consortium of banks to Etisalat Nigeria collapsed.
The filed document reads: “Further to our announcement dated 12 February, 2017, Emirates Telecommunications Group Company PJSC (Etisalat Group) would like to inform you that Emerging Markets Telecommunications Services Limited “EMTS” (“the company), established in Nigeria and an associate of Etisalat Group with effective ownership of 45 per cent and 25 per cent ordinary and preference shares respectively, defaulted on a facility agreement with a syndicate of Nigerian banks (“EMTS Lenders”).
“Subsequently, discussions between EMTS and the EMTS Lenders did not produce an agreement on a debt restructuring plan. Accordingly, the Company received a default and security Enforcement Notice on 9 June 2017 requesting EMTS Holding BV (EMTS BV) established in the Netherlands, and through which Etisalat Group holds its interest in the company) requiring EMTS BV to transfer 100 per cent of its shares in the company to the United Capital Trustees Limited (the Security Trustee”) of the EMTS Lenders by 15 June 2017. Subsequently the EMTS Lenders extended the deadline for the share transfer to 5.00 pm Lagos time on 23 June 2017”.
Meanwhile, Ibrahim Dikko, Vice President, Regulatory and Corporate Affairs, Etisalat Nigeria, in a statement said, “Etisalat Nigeria can now confirm the first stage of this has begun with a change in shareholding which was announced to the Abu Dhabi Stock Exchange this morning.
“Etisalat Nigeria can confirm discussions are on-going regarding other issues such as the trading name during this transition phase. Operations and services to our subscribers remain normal and will in no way be affected as we continue to deliver quality services to our subscribers.
“We will continue to tap into the rich, creative and innovative resources within our workforce to build a stronger business upon the stable foundation we have laid in our nine years of operations.
“Etisalat Nigeria wishes to express its profound gratitude to the Government, the Nigerian Communications Commission, (NCC) and the Central Bank of Nigeria for their patriotic zeal and tireless efforts at ensuring collaborative and productive engagement.
“We are also appreciative of the tremendous support we have received from the media since inception and we count on their continued support as we transition to a stronger business. We will update our stakeholders and the public on further developments shortly.
According to Etisalat Group’s financial report first quarter 2017 financial report seen by LEADERSHIP, Etisalat Nigeria subscriber base reached 19.5 million as at March 2017, representing year over year decline if 11 per cent attributed to tough overall economic environment that impacted consumer spending and sim disconnection in connection with regulator mandated process”.
The telecom company also said it was transferring 45% ordinary shares and 25% preferential shares to the consortium of banks.
Telecom anaysts said the incursion of the banks into the telecom space would be only temporary as they don’t have the wherewithal to run telecommunications networks.
“They are coming just to ensure that new investors come so that they walk away with their money. Already, Etisalat has paid about $700 million of the loan but the default occasioned by inability to source for foreign exchange put the operator in a hopeless situation”, the expert said.
Meanwhile, the NCC has assured Etisalat subscribers of network integrity.
According to a statement signed by its director of public affairs, Tony Ojobo, the NCC said, ‘‘The attention of the Commission has been drawn to a planned takeover of Etisalat by a consortium of banks.
‘‘The Commission is aware of the indebtedness of Etisalat to the consortium of banks. In conjunction with the Central Bank of Nigeria (CBN), it mediated by holding several meetings with the banks, Etisalat and other stakeholders with a view to finding a resolution. Regrettably, these meetings did not yield the desired results.
‘‘The NCC wishes to reassure the over 21 million Etisalat subscribers that it will do all within its regulatory power to ensure that Etisalat subscribers continue to enjoy the services provided by the operator. The Commission has taken proactive steps to cushion the impact of the takeover; this is without prejudice to the ongoing effort between Etisalat and the banks toward negotiated settlement.
‘‘In view of the recent development, NCC wishes to reassure all stakeholders in the telecommunications sector in particular the subscribers on the Etisalat Network that the Commission will ensure that the integrity of Etisalat Network is not compromised”.
The Commission also drew the attention of the banks to provisions of the Nigerian Communications Act (NCA) 2003 Section 38.