Chief Executive Officer of the bank, Mr Segun Agbaje, was quoted by
Reuters as saying that the bank was exposed to Etisalat Nigeria to the
tune of N42 billion ($138 million) via a secured loan, and would go
through a restructuring of the debt.
The loan saga started last week when the telecom company informed its
creditors in February that it would miss payment on the $1.2 billion
loan.
Apparently, the banks feared that inability to recover the loan could
expose them to the Asset Management Company of Nigeria, AMCON, which
had been demanding immediate cut down on the rate of their
non-performing loans.
The loan facility, totalling $1.2 billion (about N541.8 billion)
involving a foreign-backed guaranty bond, was for Etisalat to turn
around its network and expand its operations in Nigeria.
However, the banks claimed that Etisalat had failed to service the debt as agreed since 2016.
They subsequently reported Etisalat to the Central Bank of Nigeria,
CBN, and its communications sector counterpart, National Communications
Commission, NCC.
Meanwhile, the NCC and CBN had prevailed on the three local banks to
pursue a default deal rather than a receivership for Etisalat Nigeria so
as not to deter investors and to avoid a wider debt crisis.
Sources say another meeting will be held today between the two regulators, Etisalat and the creditors to discuss the default.
