Banks deny take over of Etisalat for N541.8bn non performing loans

Three Nigerian banks are said to have set in motion plans to take over Etisalat Nigeria despite efforts by the Nigerian Communication Commission, NCC, to broker a peaceful resolution between the telecoms firm and the banks over a N541.8bn debt.

But sources close to the banks denied knowledge of the said action saying there is no truth in the matter. According to the source in matters of bad debts and non performing loans, banks can not just take over a customer’s assets or investment, it has to apply to the courts to wind down the company. The said banks have not taken such actions as of now, therefore the story is not true.

The three banks Guaranty Trust Bank, Access Bank and Zenith Bank were said in the report to be having a running battle with the mobile telephone operator over a loan facility totalling $1.72 billion (about N541.8 billion) obtained in 2015, that is not performing.

The loan, which involved a foreign-backed guarantee bond, was for Etisalat to finance a major network rehabilitation and expansion of its operational base in Nigeria.

But owing to the company’s failure to meet its debt servicing schedule agreed since last year, the three Nigerian banks, prodded by their foreign partners, reported Etisalat to the banking sector regulator, Central Bank of Nigeria, CBN, and its communications sector counterpart, the NCC.

While Etisalat blamed its inability to fulfil its obligation to the banks on the current economic recession in Nigeria, the banks said their attempt to recover the loan by all means was fuelled by the pressure from the Asset Management Company of Nigeria, AMCON, demanding immediate cut down on the rate of their non-performing loans.