Etisalat takeover : NCC, CBN STEPS IN AS MEDIATORS

Amid the moves to takeover Etisalat by a consortium of banks, the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) have taken responsibility to ensure that the issue is resolved amicably.

According to thecable, the CBN spokesman said:

“Although it should ordinarily not be the role of a regulatory body to decide how individual loans are resolved, the CBN believes that Etisalat is a systemically important telecommunications company with over 20 million subscribers that if not well handled, may have negative implications for the banking system itself,”

Going by this words, there were perhaps some observations that a quick decision to take over a telco with over 20 million subscribers without adequate review would yield a result that will not go down too well in the nearest future.

He further explained that the CBN and NCC, sensing that banks might go ahead in the usual way and downsize the company’s over 4,000 staff, reached an agreement to intervene.

The collaborative move by the regulators was aimed at preventing job losses and asset stripping and to ensure that Etisalat remains in business and is able to pay back the loans. In days to come, this two bodies will meet with the banks, Etisalat, IHS Towers, the tower managers, equipment suppliers, just so they can all reach an agreement in favor of all stakeholders including you and I the subscribers.

From the other end of the regulatory bodies is the Director, Public Affairs of NCC, Mr. Tony Ojobo, which according to the vanguard has confirmed their proactive position in the dispute through a statement on Wednesday in Lagos.

According to him, the NCC in conjunction with the Central Bank of Nigeria (CBN), has mediated by holding several meetings with the banks, Etisalat and other stakeholders to find a solution.

“Regrettably, these meetings did not yield the desired results.
The statement said the commission had drawn the attention of the banks to provisions of the Nigerian Communications Act (NCA) 2003 Section 38: Sub-sections 1 and 2.

“Sub-section 1 says: the grant of a license shall be personal to the licensee.

“The license shall not be operated by, assigned, sub-licensed or transferred to another party unless the prior written approval of the commission has been granted;

“Sub-section 2 says: A licensee shall at all times comply by the terms and condition of the license and the provision of this act and its subsidiary legislation,’’

In summation, it can be deduced that a takeover cannot be complete without the full approval and support of the NCC and the licensee at the same time.

Banks have no intention to take over:

Reports from thisday have it that banks have informed the central bank that they have no intention of taking over Etisalat Nigeria, as had been widely reported.

They, however, expressed concern that Emirates Telecommunications Group Company (Etisalat Group), Abu Dhabi, which holds a 45 percent stake in the Nigerian subsidiary, had announced on Tuesday at the Abu Dhabi Stock Exchange of its intention to pull out from its Nigerian operations without meeting its obligations.

This action amounted to abandoning the company’s obligations in Nigeria which include:

• $1.2 billion syndicated and bilateral loans approved by 13 Nigerian banks, now delinquent;

• Taxes and levies due to the Federal Government of Nigeria and regulatory agencies; and

• Other third party creditors (i.e. vendors, service providers and contractors);

The banks said their attempt to recover the loan was due to the pressure from the Asset Management Company of Nigeria (AMCON), demanding immediate cut down on the rate of non-performing loans.

It is also perceived that the banks need the government through the Economic and Financial Crimes Commission (EFCC) to investigate how the Telecommunications company used the facilities loaned to them by the banks, perhaps there is an evidence of unaccountability.

A CBN source explained that the banks were not network  operators and had no intention of running Etisalat.

“All we want is to recover the loans; we cannot write off the loans as demanded by Etisalat, because the company is viable,” the source stated.

But also it is alleged that over 40% of the original loan has been paid and some of the bank’s claims are untrue. As it stands, we can only hope for the best out of this situation.

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