by Dolapo Adelana
Three Nigerian banks are set to take over telecommunications firm, Etisalat over its failure to pay a N541.8bn loan facility.
According to online news medium Premium Times the consortium of banks including Guaranty Trust Bank, Zenith Bank and Access Bank and some foreign banks have been a running battle with the mobile telephone operator over a loan facility totalling $1.72 billion (about N541.8 billion) obtained in 2015.
The Nigerian Communication Commission has tried to broker peace between both parties but the banks are set to take over the company on Wednesday.
The loan involved a foreign-backed guaranty bond and was for Etisalat to finance a major network rehabilitation and expansion of its operational base in Nigeria.
Due to the failure of the company to meet its debt servicing agreement scheduled since 2016, the three Nigerian banks, prodded by their foreign partners, reported Etisalat to banking sector regulator, the Central Bank of Nigeria, CBN, and its communications sector counterpart, the NCC.
Etisalat has blamed its inability to fulfil its obligation to the banks on the current economic recession in Nigeria.
According to the banks, 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.
A senior official of one of the banks who spoke on the condition of anonymity said one of the options they have proposed to Etisalat management as a middle way out of the crisis was for it to request for a bankruptcy status.
The official said the bankruptcy option would require having receivership management appointed by the banks to oversee its operations.
According to the source, the NCC is however, not favourably disposed to the takeover proposal, as it believes Etisalat was not only a viable going concern, but also willing and able to negotiate its loan servicing.
A top source at the NCC on Tuesday said the commission had approved the takeover, which is expected to occur on Wednesday.
Dolapo is a writer and journalist who works with YNaija. He has interests in Christianity, politics and sports.