Upon the complications caused by the $1.2 billion loan default by 9mobile (former Etisalat) to a consortium of banks, about 20 million Nigerians who are subscribers of the telco company may possibly be cut off from the network services of the company in 2022. More alarmingly, in that same year, over four thousand staff of the company risk being laid off as a result of this debt.
This grim disclosure was made during the investigative hearing by the Senate Joint Committee on Banking, Insurance and other Financial Institutions, Communications and others. The investigation exposed just how the loan default could threaten the existence of the telecommunications company. However, it was anticipated that this could be staved off if a new buyer surfaces, takes over the company and discharges the debt before the expiration of the 15 years (2007-2022) operational license given to the company.
Speaking at the investigative session, the Nigeria Communications Commission (NCC), represented by the Director of Legal Services, Yetunde Akinloye, stated that,
Given the financial crisis facing 9mobile, the hope was that a new investor (buyer) would emerge to take over the company, pay back the consortium of banks the loans which the original owners of the telecom company collected, and also pay for the renewal of the license to retain the services and subscribers.
She also said that if this was not possible, the banks, in alliance with their security trustees, might push to enforce the loan conditions on 9Mobile, which she explained, might involve dismantling the telecoms company to recover their investment. Akinloye further recalled that although she was not privy to the loan agreements, the NCC got a letter on the 21st of June, 2017, from United Capital Trustees Limited (Security Trustee of 9Mobile), notifying them that there was a loan default and that the lenders (banks) wanted to enforce the legal implication.
Interestingly, the CBN Governor who did not want the apex bank to become involved, dissolved the old board and constituted a new one chaired by the CBN Deputy Governor, to ensure that the 20 million subscribers and four thousand staff were not left high and dry.
On her part, Oluseyi Osusador, director of Corporate Affairs of 9mobile, who represented the telecoms company said that the company collected $1.2 billion loan from a consortium of 13 banks for network expansion across the country in 2015.
Speaking on behalf of the affected banks, Guarantee Trust Bank, represented by Haruna Musa, a Director in the bank, said the banks are the facility agent, pointing out that their role is administrative in nature. He also stated that Etisalat, in previous years, performed very well prior to 2017, after which, only 17% of the expected amount was paid. This laxity initiated the commencement of the default.
Although, the Security Trustee agent to the loan deal, represented by Tadeni Balogun claims they had plans on how to deal with the debt, the Senate lamented the incompetency of the NCC and CBN in getting this money back. The Senate also says it would do everything in its power to save the banks, industry and subscribers from this fate, even if it means involving the Nigerian President.
Hopefully, with the emergence of Teleology Holdings as the preferred bidder in the sale of 9mobile, we can only wish that the deal comes through and millions of subscribers would not have to be cut off.
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