* Etisalat may exit Nigeria over debt default
* Owns 45 pct stake in local unit after loan swap
* To meet lenders in Nigeria on Tuesday or Wednesday
* Investment firm Mubadala wants solution to debt
(Adds further details, background)
By Stanley Carvalho and Chijioke Ohuocha
DUBAI/LAGOS, March 13 Abu Dhabi telecoms group
Etisalat may sell its stake in Etisalat Nigeria, which
has defaulted on a $1.2 billion loan, but wants the company's
debt restructured before it does so, two sources told Reuters on
Nigeria's central bank and telecoms regulator on Friday
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 crisis.
Etisalat is due to meet with creditors in Nigeria on Tuesday
or Wednesday to discuss the default, the source said.
It was not clear whether Etisalat, which has a 45 percent
holding in Etisalat Nigeria after converting a loan to equity in
February, would divest completely.
Ahmed Bin Ali, senior vice president of Etisalat, declined
to comment, while Etisalat Nigeria could not be reached.
"It is at an early stage," one source said of the sale.
Last week a banking source told Reuters that the Nigerian
affiliate of Etisalat had given notice to its Nigerian lenders
that it would miss a payment in February but the two sides are
yet to agree terms.
Etisalat Nigeria 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 modernise its network.
But an economic downturn, a currency devaluation and dollar
shortages on Nigeria's interbank market led to it missing
payment, Ibrahim Dikko, vice president for regulatory affairs at
Etisalat Nigeria, has said.
Banks involved in the loan include: Zenith Bank, GT Bank,
First Bank, UBA, Fidelity Bank, Access Bank, Ecobank, FCMB,
Stanbic IBTC Bank and Union Bank.
Abu Dhabi state investment fund Mubadala, which has a 40
percent stake in Etisalat Nigeria, wants a solution found,
another source said. Mubadala declined to comment.
Etisalat has been hit hardest among foreign firms by dollar
shortages in Nigeria. Firms which invested in the West African
nation in the era of high oil prices are struggling to repay
loans or keep operating as the oil producer suffers from a slump
in oil revenues, hitting its currency and dollar reserves.
Etisalat's chief strategy officer, Khalifa Hassan al-Forah
al-Shamsi, told Reuters that it was making sure that in markets
where there are currency fluctuations, operating costs are in
local currency. Though he was not responsible for Nigeria.
The Nigerian naira lost a third of its official value
against the dollar last year.
Etisalat Nigeria has 20 million subscribers, according to
Nigeria's telecom regulator, making it the country's number four
mobile operator with a 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.
Etisalat had been asked to increase its stake in the
Nigerian business, which made up 3.7 percent of its revenues,
but questioned the rationale for doing so, given that Nigeria
was in its first recession in a quarter of a century, Access
Bank chief executive Herbert Wigwe told an analyst call.
Wigwe said on Thursday that Etisalat Nigeria owed Access
Bank 40 billion naira ($127 mln).
($1 = 314.50 naira)
(Additional reporting by Alexander Cornwell in Dubai; Editing
by Jason Neely and Alexander Smith)