Tele­coms group cuts Nige­rian links

The Star Early Edition - - COMPANIES -

TELE­COMS group Etisalat has ter­mi­nated a man­age­ment agree­ment with its Nige­rian arm and given the busi­ness time to phase out the Etisalat brand in Nige­ria, the chief ex­ec­u­tive of Etisalat In­ter­na­tional said yes­ter­day. Nige­rian reg­u­la­tors in­ter­vened last week to save Etisalat Nige­ria from col­lapse af­ter talks with its lenders to rene­go­ti­ate a $1.2 bil­lion (R16.05bn) loan failed. Etisalat, with a 45 per­cent stake in the Nige­rian busi­ness, said in June that it had been ordered to trans­fer its shares to a loan trustee af­ter the talks had failed. Chief ex­ec­u­tive of Etisalat In­ter­na­tional Hatem Dowidar said all United Arab Emi­rate share­hold­ers of Etisalat Nige­ria, in­clud­ing state-owned in­vest­ment fund Mubadala, had ex­ited the com­pany and left the board and man­age­ment. He said in an in­ter­view dis­cus­sions were on­go­ing with Etisalat Nige­ria to pro­vide tech­ni­cal sup­port, adding that it could con­tinue to use the brand for another three­weeks be­fore phas­ing it out. “There’s a new board and we are not part of that com­pany. We have sent our ter­mi­na­tion let­ter for the man­age­ment agree­ment,” he said. Etisalat Nige­ria is the big­gest for­eign-owned vic­tim of dol­lar short­ages plagu­ing the coun­try due to lower oil prices and eco­nomic re­ces­sion, leav­ing the com­pany strug­gling to make re­pay­ments to lenders and sup­pli­ers. Etisalat Nige­ria took out a $1.2bn loan with 13 lo­cal lenders in 2013 to re­fi­nance an ex­ist­ing loan and fund ex­pan­sion, but strug­gled to re­pay four years later. Dowidar said par­ent Etisalat had writ­ten down the value of the Nige­rian busi­ness on its books and that trans­fer­ring its 45 per­cent stake to the lenders af­ter loan rene­go­ti­a­tion talks col­lapsed had no im­pact on the group. South Africa’s MTN is the big­gest player in Nige­ria’s tele­coms in­dus­try, while Etisalat, with a 14 per­cent mar­ket share, has strug­gled to com­pete. Asked whether Etisalat would con­sider en­ter­ing Nige­ria again, Dowidar said: “The train has left the sta­tion on that one.”

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.