As we reported late last month of Etisalat’s indebtedness and subsequent take over by CBN. The new board members, with chairman as Dr. Joseph Nnanna immediately resumed office and went into action. The new brand name was decided at a meeting held in Lagos by Emerging Markets Telecommunication Services (
As expected, following the call by Etisalat Dubia requesting for a change of name, a new brand name was decided at a meeting held in Lagos by Emerging Markets Telecommunication Services (EMTS), which had been trading as Etisalat Nigeria before the withdrawal of Abu-Dhabi-based Emirates Telecommunications Group Company (Etisalat Group) as a shareholder in the Nigerian telco.
Shortly after the meeting, where the new name was adopted, the management sent a notification to its staff, informing them of the name change to 9Mobile
But even as Etisalat Nigeria moves forward with a new brand identity, its rescue has put its lenders in a quandary as they prepare for half-year results due this month.
Most crucially, the banks do not know whether to provide for loans to the company until they can work out its value.
A banking source told Reuters that the lenders first wanted to determine Etisalat Nigeria’s free cash flow to help them value its business before deciding on whether to impair the assets on their balance sheets or hold on to find new investors.
“No bank is talking about restructuring now, but it might get to that later once we are able to ascertain the true value of the company,” the source told Reuters.
Nigerian regulators intervened last week to save Etisalat Nigeria, the country’s fourth-largest mobile operator, from collapse and prevent lenders from placing the telecoms firm in receivership, prompting a board and management change.
Banks involved in the loan deal include Zenith Bank, GT Bank, First Bank, UBA, Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank. Results are due from this month.
GT Bank with $138 million in outstanding loans and Access Bank with $131 million are among the most exposed to Etisalat Nigeria.
“We think that by the time the new management settles in, makes some changes and reduces costs, the company might bounce back,” the source said, adding that he expected support from the central bank, which has sought to avoid Etisalat Nigeria’s collapse from sparking a wider debt crisis.
Reuters also reported that the Chief Executive of Etisalat International, Hatem Dowidar, said the company with a 45% in the Nigerian business, is transferring its shares to a loan trustee after the talks had failed.
Dowidar also confirmed that all UAE shareholders of Etisalat Nigeria, including state-owned investment fund Mubadala, have left the company.
“There’s a new board and we are not part of that company. We have sent our termination letter for the management agreement,” he said.
When asked if the company will return to the country anytime soon, Dowidar replied: “the train has left the station on that one. Being in that market as an investor … are we willing to risk more money compared to the reward for the long-term?
“(Nigerian) lenders may try to continue to operate the company until they find a buyer (or) they may merge the company with the existing players in Nigeria, he said, adding that it was tough to say what lenders would do.
“The brand agreement in either of these two scenarios won’t be a long-term thing, so we take out the brand; in the long term Etisalat won’t be in Nigeria.”