Zenith Bank Makes Provision On 30% For 9mobile Loan

By Nse Anthony-Uko, With Agency
(Sundiata Finance) — Zenith Bank Plc said it has made a provision on 30 per cent of its loan to 9mobile, formerly known as Etisalat Nigeria.
The chief executive of the Bank, Peter Amangbo made the disclosure in a conference call, Reuters report.
“We have taken about 30 per cent as a provision which we believe is very prudent as the company is undergoing restructuring to prepare for a new investor,” Amangbo told a conference call.
Both the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) had in July intervened to save Etisalat Nigeria from collapse over a $1.2 billion four-year old debt to a consortium of 13 banks.
The intervention shielded the company from being placed on receivership by the banks, prompting a pullout by the company’s core investors- United Arab Emirates’ Etisalat and Mubadala Development Company, which together controlled 85 per cent stake in the company.
This was followed by the resignation of Hakeem Belo-Osagie, chairman of Etisalat Nigeria, who had the remaining 15 per cent stake, resulting in dissolution of the company’s board and management and the subsequently name change as demanded by the Emirati core investor.
The local banks which participated in 9Mobile’s loan deal are, Zenith Bank, GTBank, First Bank, UBA, Fidelity Bank, Access Bank, Ecobank, First City Monument Bank, Stanbic IBTC Bank and Union Bank. Failure to repay the $1.2bn loan was blamed on a currency crisis and a recession in Nigeria.
Although Zenith Bank declined to disclose its total exposure to the telecoms group, Reuters quoted a source familiar with the matter as saying Zenith Bank is the largest lender to 9Mobile.
The bank, last week presented its audited half-year result to the Nigerian Stock Exchange (NSE) showing a Profit Before Tax (PBT) of N92.18 billion, compared to the previous N53.91 billion. Zenith Bank had announced a 25 kobo dividend payout with its half-year results, which disappointed the market as its share price declined.

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