Telecoms group cuts Nigerian links

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.”