Abu Dhabi telecoms group, Etisalat, may sell its stake in Etisalat Nigeria, which has defaulted on a $1.2 billion loan.
It, however, wants the company’s debt restructured before it does so, according to a report by Reuters, quoting two sources, on Monday.
The Central Bank of Nigeria (CBN) and the Nigerian Communications Commission, on Friday, agreed with 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.
Etisalat is due to meet with creditors on Tuesday or Wednesday to discuss the default, the source said.
It was not clear whether Etisalat, which has a 45 percent holding in Etisalat Nigeria after converting a loan to equity in February, would divest completely.
Ahmed Bin Ali, senior vice president of Etisalat, declined Reuters’ request for comments, while Etisalat Nigeria could not be reached.
“It is at an early stage,” a source said of the sale.
Etisalat Nigeria signed a $1.2 billion medium-term facility with 13 Nigerian banks in 2013, which it used to refinance an existing $650 million loan and modernise its network.
But an economic downturn, a currency devaluation and dollar shortages on Nigeria’s interbank market led to it missing payment.
Banks involved in the loan include: Zenith Bank, GTBank, First Bank, UBA, Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank.
Abu Dhabi state investment fund, Mubadala, which has a 40 percent stake in Etisalat Nigeria, wants a solution found, another source said.
Mubadala declined to comment.
Etisalat’s chief strategy officer, Khalifa Hassan al-Forah al-Shamsi, told Reuters that it was making sure that in markets where there are currency fluctuations, operating costs are in local currency. Though he was not responsible for Nigeria.
The naira lost a third of its official value against the dollar last year.
Etisalat Nigeria has 20 million subscribers, according to Nigeria’s telecom regulator, making it the country’s number four mobile operator with a 14 percent market share.
