The unfolding crisis at Etisalat Nigeria has resulted in more drama on Friday as the Chairman, Hakeem Bello Osagie resigned his position..
Insiders said Bello Osagie’s resignation was not unexpected. In fact, he was said to have been working seriously to remedy the crisis and probably resolve the crisis. Many had expected him to throw in the towel much earlier. All other directors had resigned earlier
Earlier, Thisday reported that some directors had resigned as a way out of the stalemate over loan owed banks.
A consortium of 13 banks which advanced a dollar-denominated loan of $1.2 billion have been working hard to takeover the telecom firm following its default in paying back the loan facility. It is believed that Etisalat may have repaid just half of the loan, which it took in 2013 to expand its network.
The banks’ initial aggression to take over the company seemed to have come to its final realisation when Mubadala and its subsidiary Etisalat International, the foreign shareholders, pulled out their 70 per cent stake a week ago.
However, warnings from Nigerian Communications Commission (NCC) that the telecom licence of Etisalat was non-transferable put paid to the banks’ plans to effect a straight takeover and appoint a technical partner.
Their plan was to takeover the company and get a network provider to run it. The NCC licence approval rules clearly bar a transfer of frequency to another company without NCC’s approval. The NCC and Central Bank of Nigeria (CBN) have tried to stave the banks from taking over the assets of the company. The banks realized that the single most important asset of Etisalat is not its physical assets but the telecom licence, where it has over 20 million subscribers.
The fresh challenge may have pushed the banks to push for the repayment of the loans, a transaction for which the shareholders would be personally liable beyond their shareholdings. There are also fears about Etisalat’s International’s track record in India and Tanzania where huge loan facilities were left unpaid.
The Mr. Hakeem Bello-Osagie’s resignation has been confirmed by an press release from the telecoms firm. It said Bello Osagie resigned his appointment following the approval of a restructuring plan for the telecommunications firm.The resignation is effective immediately.
The statement from the telecoms firm said, although the chairman had planned to leave immediately the banks made the take-over move, he opted to tarry until a road map for the company was finalised.
It also said “The timing of the resignation was strategically delayed till now when stakeholders have agreed a plan and comes more than a week after Mubadala Development Company directors tendered their resignation. The development also reflects Mr. Bello-Osagie’s deep commitment to protecting the interest of all stakeholders.
Also, it is now expected that Etisalat Nigeria under its new shareholding structure will navigate through its current loan repayment challenge with minimum impact.
“Over the last several months, the (outgoing)chairman has worked extensively with critical stakeholders to prepare clearly articulated strategies and robust road maps that will mitigate the impact of the new shareholding restructuring and realignment on the operations and management of the 4th largest telecoms player in Nigeria.”
“With this development, the new board will assume control of Etisalat” the statement said.
“This is coming following interventions, which have been roundly applauded, from regulatory agencies, including the Nigeria Communications commission (NCC) and Central Bank of Nigeria (CBN) and other stakeholders to ensure that the best decisions are taken in the interest of the subscribers, employees and the Nigerian economy.
“Further announcements on the composition of the new board are expected from the stakeholders. “