By Modupe Gbadeyanka
Some shareholders of publicly quoted banks in Nigeria exposed to the $1.2 billion loan obtained by 9mobile, formerly Etisalat Nigeria, are beginning to express joy at news that the telecom firm has commenced repayment of the debt.
Some days ago, Teleology Holdings Limited confirmed taking over the debt-ridden 9mobile after a vigorous bidding process, which began in 2017.
Etisalat Nigeria had approached a consortium of Nigerian lenders for a credit facility aimed at expanding its operations in the country. However, when it was unable to service the loan, attempts were made by the lender to take over the company, but the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) prevented this.
Instead, the CBN set up an interim board to run the Etisalat Nigeria, which later changed its name to 9mobile, until a buyer was sourced.
Few weeks ago, Teleology announced a new board for 9mobile, confirming that it was now in charge of the nation’s fourth GSM service provider.
More than 10 Nigerian banks syndicated the loan to Etisalat Nigeria, including Guaranty Trust Bank (GTBank) Plc, Access Bank Plc, Zenith Bank Plc and United Bank for Africa (UBA).
Some of the lenders made provisions on the loans or classified them as non-performing in 2017 and this year.
In a report by Bloomberg, Head of Investor Relations at UBA, Mr Abiola Rasaq, was quoted as saying that, “The money has been distributed to the banks.”
According to him, the reimbursement is expected to improve the asset quality of the creditor banks that had classified the loan as non-performing.
UBA made a N15.2 billion ($41 million) provision on the loan last year.
Bloomberg said 9mobile repaid $251 million last week from the proceeds of the fund Teleology paid for the acquisition, according to two persons familiar with the matter who asked not to be named because they were not permitted to speak publicly on the issue.
A spokeswoman for 9mobile didn’t respond to phone calls and email messages seeking comments. Spokespersons from six of the creditor banks reached by Bloomberg declined to comment.
Each creditor bank was repaid a proportion of the outstanding debt, according to the sources.
The former Etisalat fell into crisis when it defaulted on a loan repayment scheme to the tune of $1.2bn due to a consortium of 13 local banks, citing economic downturn and currency devaluation.
This led to the exit of the Etisalat Group of the United Arab Emirates from the company, which handed over its 45 per cent stake, terminated its existing management and technical support agreements with the telecom company.
Over the weekend, some shareholders, who spoke with Business Post, described this development as comforting, saying it will go a long way to reduce NPLs.
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