Nigeria's central bank said it has intervened in the face off between 13 banks and Etisalat after the telecoms firm failed to renegotiate a $1.2 billion loan taken out four years ago amid a report that the Dhabi state investment fund Mubadala has pulled out of Etisalat Nigeria.
The central bank, which gave on the withdrawal of Mubadala Fund from the local firm, said it had intervened in the loan renegotiation talks to prevent job losses and asset stripping.
Etisalat Nigeria had repaid $500 million of the loan before it defaulted in February due to a currency devaluation and its only remaining investors are its Nigerian partners, led by company chairman Hakeem Belo-Osagie.
On Tuesday, parent company United Arab Emirates' Etisalat, said it was carrying its 45-percent stake at nil value, and that the Nigerian lenders had ordered it to transfer its shares to a loan trustee by June 23 after the renegotiation failed.
Neither Etisalat nor Mubadala, which owns 40 percent of Etisalat Nigeria, could be reached for comment.
"Given the inability of Etisalat (Nigeria) to come to an acceptable agreement with the banks, the largest shareholder in the company, Dubai-based Mubadala Development Company of the United Arab Emirates, has now pulled out of the company as well as the ongoing negotiations," the central bank said.
"It was based on the attempt of the banks to takeover the company that the financial and telecommunications regulators have moved in to intervene and forestall down-sizing and asset stripping," it said.
In March, the central bank, which is also the banking watchdog, and the Nigeria Communications Commission (NCC)regulator tried to prevent lenders placing the firm in receivership to avoid a wider debt crisis and agreed with banks to pursue a default deal.
But lenders, under pressure to avoid loan-loss provisions, have been pushing to finalise a restructuring before half-yearly audits this month.
Central bank spokesman Isaac Okorafor said representatives from the central bank and the telecoms regulator would hold talks in the next few days with lenders and IHS Towers, the mobile phone tower managers, as well as "equipment suppliers".
The original loan was a seven-year facility to refinance a $650 million loan and fund expansion of Etisalat Nigeria's network. The company missed payments in February after sharp falls in the Nigerian naira bloated the loan's value, making repayments difficult.
Etisalat is Nigeria's fourth biggest 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 of Nigeria's mobile phone market.
Etisalat Nigeria had repaid $500 million of the loan before it defaulted in February due to a currency devaluation and its only remaining investors are its Nigerian partners, led by company chairman Hakeem Belo-Osagie.
On Tuesday, parent company United Arab Emirates' Etisalat, said it was carrying its 45-percent stake at nil value, and that the Nigerian lenders had ordered it to transfer its shares to a loan trustee by June 23 after the renegotiation failed.
Neither Etisalat nor Mubadala, which owns 40 percent of Etisalat Nigeria, could be reached for comment.
"Given the inability of Etisalat (Nigeria) to come to an acceptable agreement with the banks, the largest shareholder in the company, Dubai-based Mubadala Development Company of the United Arab Emirates, has now pulled out of the company as well as the ongoing negotiations," the central bank said.
"It was based on the attempt of the banks to takeover the company that the financial and telecommunications regulators have moved in to intervene and forestall down-sizing and asset stripping," it said.
In March, the central bank, which is also the banking watchdog, and the Nigeria Communications Commission (NCC)regulator tried to prevent lenders placing the firm in receivership to avoid a wider debt crisis and agreed with banks to pursue a default deal.
But lenders, under pressure to avoid loan-loss provisions, have been pushing to finalise a restructuring before half-yearly audits this month.
Central bank spokesman Isaac Okorafor said representatives from the central bank and the telecoms regulator would hold talks in the next few days with lenders and IHS Towers, the mobile phone tower managers, as well as "equipment suppliers".
The original loan was a seven-year facility to refinance a $650 million loan and fund expansion of Etisalat Nigeria's network. The company missed payments in February after sharp falls in the Nigerian naira bloated the loan's value, making repayments difficult.
Etisalat is Nigeria's fourth biggest 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 of Nigeria's mobile phone market.
(C) Reuters News
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