By Nse Anthony-Uko
(Sundiata Finance) – The shares of major lenders to Etisalat declined on Tuesday on the Nigerian Stock Exchange (NSE) as the telecom company announced a new management and board.
The consortium of 13 Nigerian banks, the Central Bank of Nigeria (CBN) and Etisalat shareholders, appointed the new board of directors to continue the operations of the telecommunications company as part of the takeover agreement. This follows the failure of Etisalat to fulfil its debt conditions after taking a $1.2 billion loan for expansion in 2013.
But initial panic that the CBN may force the banks to take a hair cut on the debts owed to them by Etisalat, resulting in a sharp drop in their shares.
United Bank for Africa (UBA) topped the decliners with a fall of -5.75 per cent. Pan-African lender Ecobank shed -4.94 percent, Diamond Bank and FCMB both lost -4.72 per cent, Guaranty Trust lost-1.3 percent, Stanbic lost -3.0 per cent, FBNH lost -3.4 per cent and Access -2.3 per cent each, contributing to a 1.1 per cent drop in the All Share Index on Tuesday.
Renaissance Capital had valued Etisalat at US$1.2 billion. Etisalat Nigeria had repaid $500 million of the loan before it defaulted in February due to currency devaluation.
The new appointees to the Etisalat board are Joseph Nnanna, an economist and Central Banker, as the new Chairman; Oluseyi Bickersteth, a national senior partner of KPMG as non- executive director; Boye Olusanya, former Deputy Chief Executive Officer of Econet Wireless and Celtel Nigeria, as Chief Executive Officer; Funke Ighodaro, a chartered accountant and former Chief Financial Officer of Tiger Brands Limited and Ken Igbokwe, who is also an accountant and the Country Business Executive Leader of Price Waterhouse Coopers (PwC) Nigeria and West Africa.
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.
Etisalat Nigeria said it had serviced its debt obligation up until February 2017. The outstanding loan sum to the lenders stands at $227m and N113bn, a total of about $574 million if the naira portion is converted to US Dollars.