BEVERLY HILLS, October 24, (THEWILL) – The Senate has resolved to investigate the management and utilization of the $1.2 billion loan facility obtained by Etisalat (Nigeria) from 13 Nigerian banks and mandated its Committees on Banking, Communications, Capital Market and National Security and Intelligence to probe the deal.
It also asked the joint Committee to make recommendations on ways the country’s Financial Governance Structure could be strengthened by legislations to prevent any future similar reoccurrence of such crisis.
The resolutions followed the adoption a motion on “the need for Senate’s intervention in the recent ETISALAT (Nigeria) $1.2 billion debt crisis” on Tuesday, sponsored by Senator Solomon Adeola (Lagos West).
Adeola in his lead debate noted that Etisalat Nigeria, a Telecommunication Company operating in Nigeria has in recent times been in the public eye over it’s $1.2bn loan crisis saying that he is aware that the syndicated loan was acquired in 2013 as a medium-term, seven-year facility to fund expansion of the network from a consortium of 13 Banks in Nigeria.
He revealed that Etisalat ownership comprised of three shareholders, the United Arab Emirates Sovereign Wealth Fund through Mubadala Development Comp Abu Dhabi (45 /u), Emirates Telecommunications Group Company (40%) and Myacinth (15%) through Emerging Markets Telecommunications Services.
Adeola said that as of 2016, the company had started defaulting on its $1.2 billion loan obligations leading to a few bailouts from its Parent Company in Abu Dhabi and noted that only about 42% of the loan has been repaid, remaining an outstanding debt of $696 million representing 58% of its Capital, which Etisalat has failed to service since 2016.
Adeola added that the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) have intervened and raised issues of regulatory compliances in trying to prevent a takeover by the banks, but the intervention has failed to produce an agreement on the debt restructuring.
He observed that all UAE shareholders of Etisalat Nigeria, including state-owned investment fund, Mubadala, had exited the company coupled with the resignation of top key management officers of the Company such as the Chief Executive Officer, Mr. Matthew Willsher; Chief Financial Officer, Mr. Wole Obasunloye; Director and the 3rd Shareholder/Partner, Mr. Hakeem Belo Osagie.
Adeola regretted that although it should ordinarily not be the duty of the Senate of the Federal Republic of Nigeria to wade into individual debt crisis of private sector businesses; but the Senate is convinced that if the situation was not properly handled, it will have negative implications for the Nigerian Business Environment and on Foreign Investments in Nigeria in general.
He stated that a loan of this magnitude has the capacity of setting off another Banking crisis in Nigeria, with Banks looking for bailout funds once again insisting that the Nigerian Business Environment must be protected and insulated from all forms of fraudulent dealings in order to advance the Government’s drive towards promotion of genuine investments in Nigeria.
He noted that about 4000 jobs are at stake as a result of the decision of the core investors to pull out of Nigeria raises issues of suspicion, on the intent of a Company in obtaining a loan facility, defaulting and then pulling out of the country, hoping that their shares would be used to write off the debts.
Senate President, Abubakar Bukola Saraki, said that the Senate must do what it could to protect jobs in the country and work to ensure that the right thing is always done as the Senate urged relevant financial intelligence agencies of the Federal Government to investigate the management of Etisalat (Nigeria) and hold the defaulting parties accountable for their actions.
