LAGOS May 9 Talks between the Nigerian arm of
Abu Dhabi's Etisalat and its lenders to renegotiate
the terms of a $1.2 billion loan have reached deadlock after the
telecoms firm missed a payment, two sources with knowledge of
the matter told Reuters.
Lenders, under pressure to avoid loan-loss provisions, are
pushing to finalise the debt restructuring before next month's
half-yearly audit, a banking source said.
Etisalat met with the lenders in London on April 28 led by
Guaranty Trust Bank but they could not agree a way
forward, the sources said.
Etisalat could not be reached for comment.
The telecom firm signed the medium-term seven-year facility
with 13 local banks in 2013 to refinance a $650 million loan and
fund expansion of its network, but is now struggling to repay.
Etisalat Nigeria told Reuters that it was in talks with
lenders to restructure the loan after it missed a
"There is no conclusive view on the way forward," one banker
who declined to be named told Reuters after the meeting. "The
most viable solution which the banks are pushing for is for the
shareholders to inject equity into the business."
A source at Etisalat, which owns 45 percent of the Nigerian
company, 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 $50 million.
Abu Dhabi's state-owned fund Mubadala owns
another 40 percent.
Etisalat is the biggest foreign-owned victim of the dollar
shortages plaguing Nigeria's financial system.
Nigerian regulators in March agreed with local banks to
pursue a default deal rather than a receivership for Etisalat
Nigeria so as not to deter investors and to avoid a wider debt
But lenders are keen to keep a lid on rising non-performing
loans (NPLs) to preserve their capital as Africa's biggest
economy battles a recession and currency crisis. NPLs hit 14
percent in 2016 from 5.3 percent a year earlier.
Etisalat has 20 million subscribers, making it Nigeria's
number four mobile operator with 14 percent market share. South
Africa's MTN has 47 percent, Globacom 20 percent and Airtel - a
subsidiary of India's Bharti Airtel - 19 percent.
(Additional reporting by Stanley Carvalho in Dubai; Editing by