The formal announcement of the exit of Mubadala Development Company as the largest shareholder of Etisalat Nigeria Limited and a new ownership structure is being delayed to allow investment, debt and regulatory issues to be resolved, those briefed about the talks have said.
The exit of the United Arab Emirates, UAE, investor from Nigeria's fourth largest telecommunication firm, which was reported exclusively last week by PREMIUM TIMES, is yet to be officially confirmed either by Mubadala, Etisalat or the regulator, the Nigerian Communications Commission.
Despite repeated contacts with both companies and the NCC, none has formally confirmed the development, which has already signaled more trouble for the debt-plagued Nigerian telecom firm.
The spokesperson for the NCC, Tony Ojobo, insisted the commission was yet to be formally informed of the withdrawal of Mubadala.
But he said whatever the outcome, all parties involved would have to meet first to resolve all the issues, to know how to move forward.
"Whatever statement will be made will be based on the discussions and agreement reached. This cannot be concluded earlier than early next week (this week)," Mr. Ojobo said.
He said there were certain critical issues that need to be settled before the announcement could be made public.
"The issue involves two regulating authorities in the Nigerian economy - the NCC and the financial sector regulator, the Central Bank of Nigeria, CBN," Mr. Ojobo told PREMIUM TIMES on Friday in a telephone chat in Abuja.
"The issue at stake has to do an operating license issued to a telecom mobile operator, which had terms and conditions attached to the award. Again, there is the issue of the debt, which brought an agreement between CBN, the banks and Etisalat," Mr. Ojobo explained.
Although Etisalat management was also cautious not to be seen to have confirmed the exit of its majority shareholder, it however acknowledged PREMIUM TIMES report, saying its immediate focus was to reach a final resolution on the debt crisis with consortium of banks.
Its vice President, Regulatory & Corporate Affairs, Ibrahim Dikko, in a statement said the reported exit of Mubadala was premature to accept, as discussions were ongoing to affirm that as a conclusive option.
"Etisalat Nigeria considers it pertinent to state that parties to the negotiations are considering a number of options, and discussions are at an advanced stage regarding the syndicated loan agreement with the banks.
"We are considering a number of options and are not taking anything off the table at this time. Parties are keen to ensure that the ongoing discussions and eventual outcome do not affect the day to day operations of the business, whether now or after the announcement of our agreement," Mr. Dikko said.
Etisalat Nigeria has been in the eye of the storm following a financial crisis in the wake of pressure on it by a consortium of some foreign and Nigerian banks, led by Access Bank, to recover a $1.72 billion (about N541.8 billion) loan facility the company obtained in 2015.
The loan, which involved a foreign-backed guaranty bond, was for Etisalat to finance a major network rehabilitation and expansion of its operational base in Nigeria.
Its inability to meet its debt servicing obligation agreed since 2016 compelled the consortium of banks, prodded by their foreign partners, to take up the matter with the NCC.
When engagements involving the NCC failed to yield an amicable settlement, the telecom sector regulator invited the intervention of the CBN, its financial sector counterpart.
The intervention of the two regulatory authorities persuaded the banks to suspend their decision to take over Etisalat Nigeria, giving it an opportunity to renegotiate and reschedule the loan repayment date.
Mubadala, which controls 70 per cent stake in Etisalat along with its affiliate, Etisalat UAE mobile, was at the head of the renegotiation process.
But, following the rejection of the proposed May 31 repayment date, the banks issued a default note to Etisalat, which forms part of the ongoing negotiations.
With the imminent departure of Mubadala, Etisalat Nigeria would be left in the control of Emerging Markets Telecommunications Services (EMTS, promoted by Hakeem Bello-Osagie, which controls 30 per cent of the shareholding of the company.
To allow for a new ownership structure for company, it was learnt that the board of Etisalat Nigeria would have to be dissolved, with the creditor banks effectively taking control through a holding company they would present for NCC's approval.
Already, the banks are said to be looking towards U.K. for a possible replacement to Mubadala at the end of negotiations.
Multiple sources familiar with the crisis said even the banks understand the importance of Mubadala being around to be part of the negotiations.
"The consortium of banks know if Mubadala is allowed to make its exit from Etisalat public at this point, they will lose the operational license. The license issued to Etisalat to operate a mobile telephone system was on the strength of Mubadala's involvement as a major shareholder," one of the sources said.
Aware of the damaging impact any information about Mubadala's exit could have on ongoing negotiations on the debt issue, the source said the banks have joined in prevailing on the UAE investor to delay a little further the public announcement of its imminent departure from Nigeria.
One of the sources who requested that his name should not be revealed, as he was not authorised to speak on the issue, said Mubadala, which is equally scaling down its investments in other locations around the world, agreed to play along.
"The company believes it has since recouped its investment in Nigeria and has nothing to lose doing the bidding of the banks and Etisalat," another source said.
But, PREMIUM TIMES learnt the Nigerian government was also concerned about the possible backlash of Mubadala's exit on the worsening economy and was doing everything to patch up things to make Etisalat stay afloat.
"Everybody is cautious about the investment. Government's greatest concern is that allowing Etisalat to go under at this time will not only worsen the unemployment situation, but will give Nigeria a bad name, as an unstable business destination. That is why all the parties, including the CBN and NCC, are doing everything to manage the information about Mubadala's departure till after the negotiations," the source added.
Etisalat, which commenced business in Nigeria in 2009, acquired the unified access license, including a mobile license and spectrum in the GSM 1800 and 900 MHZ bands from the NCC in January 2007.
The company is rated by the NCC as Nigeria's fourth largest telecoms operator, with about 21 million subscribers or about 12.9 per cent of the telecom market share as at January 2017.
MTN takes the lead with 60 million, or 40 per cent market share; Globacom, 37million, or 24.6 per cent; and Airtel 34.6 million, or 22.8 per cent.