24 October 2017

Nigeria: Senate Probes Etisalat's $1.2 Billion Debt

Photo: Premium Times
An Etisalat Office

The Senate on Tuesday resolved to intervene in the $1.2 billion debt crisis rocking Nigerian telecommunications company, Etisalat, now known as 9mobile.

Leading the motion, Adeola Olamilakan (Lagos-APC) noted that the seven-year syndicated loan was acquired in 2013 from a consortium of 13 banks in Nigeria as a mid-term facility to fund the expansion of the company's network .

"As of 2016, the company had started defaulting on the $1.2 billion loan obligations leading to a few bailouts from its parent company in Abu Dhabi," he said.

He noted that "only 42% of this loan has been repaid, remaining an outstanding debt of $696 million representing 58% of its capital, which Etisalat has failed to service since 2016."

Mr. Olamilekan observed that about 4000 jobs are at stake and that a loan of such magnitude could set off another banking crisis in Nigeria.

Barau Jibrin (Kano-APC) said the motion should be passed urgently to prevent further job loss.

"I support this motion. We need to find out those who spent this money. We cannot allow 4,000 Nigerians to lose their jobs," he said.

Magnus Abe (Rivers-APC), while speaking on the motion asked for a complete overhaul of the corporate business environment in Nigeria order to check the excesses of foreign investors.

"All over the world, the integrity of any country does not only depend on the stock market but also on the behaviour of top companies," he said.

"We cannot allow foreign investors to just come to this country and do what they like. We need to look at this issue from the angle of regulating the corporate business world and stock exchange market."

The Senate mandated its Committee on Banking, Communications, Capital Market and National Security to investigate the management and utilisation of the loan facility and make recommendations to prevent similar occurrences in the future.

The Senate also urged relevant financial agencies of the Federal Government to investigate the management of Etisalat and all defaulting parties.

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