Etisalat Exits Nigeria as loan talks fail

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Etisalat Nigeria

Abu Dhabi’s Etisalat has reportedly terminated its management agreement with Etisalat Nigeria and given the business time to phase out the brand in Nigeria, the chief executive of Etisalat International.

Nigerian regulators intervened last week to save Etisalat Nigeria from collapse after talks with its lenders to renegotiate a $1.2 billion loan failed.

All UAE shareholders of Etisalat Nigeria have exited the company and have left the board and management, Hatem Dowidar said in an interview.

Asked whether Etisalat would consider entering Nigeria again, Dowidar said: “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?”

The CEO said Etisalat had been unsuccessful at converting some of its dollar debt to local Nigerian currency. He also said the group might exit or merge with a local rival in markets where it was not one of the top two players. He did not specify which markets.

Etisalat is among the top two in markets such as the UAE, Saudi Arabia, Morocco, Egypt and Afghanistan, he said.

“(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.”

He said discussions were ongoing with Etisalat Nigeria to provide technical support, adding that it can use the brand for another three-weeks before phasing it out, Reuters reports.

Etisalat Nigeria is the biggest foreign-owned victim of dollar shortages plaguing the country due to lower oil prices and economic recession, leaving the company struggling to make repayments to lenders and suppliers.

Etisalat Nigeria took-out a $1.2 billion loan with 13 local lenders in 2013 to refinance an existing loan and fund expansion, but struggled to repay four years later.

 

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