Etisalat blames woes on naira devaluation, economic downturn

THE management of Etisalat Nigeria, on Thursday, blamed its predicament on the nation’s economic downturn and devaluation of the currency.

The telecommunications firm, whose parent company in Abu Dhabi had to shed its equity earlier in the week sequel to failure to repay a loan facilitated by a consortium of 13 banks, said the “sharp devaluations of the naira negatively impacted on the dollar-denominated loan” it took from the consortium and impeded its repayment plans.

Etisalat, in a statement signed by its Vice President, Regulatory and Corporate Affairs, Ibrahim Dikko, said, “It would be recalled that the $1.2bn loan, a medium-term seven-year facility, was obtained by Etisalat Nigeria for the purpose of expanding its network and improving the quality of service on its network. The economic downturn of 2015 and sharp devaluations of the naira negatively impacted on the dollar-denominated loan by driving up the loan value, thus prompting Etisalat to request a loan restructuring from the consortium of banks.”

The telecommunications company added, “Prior to this time, Etisalat had in fact consistently and conscientiously met up with its payment obligations. As at today, we can categorically state that the outstanding loan sum to the consortium stands at $227m and N113bn, a total of about $574m if the naira portion is converted to US Dollars.

“This in essence means almost half of the original loan of $1.2bn, has been repaid. Etisalat continued to service the loan up until February 2017, when discussions with the banks regarding the repayment restructuring commenced.”

While debunking report in some quarters that the company was being investigated by the Economic and Financial Crimes Commission (EFCC) on how the syndicated loan it took was utilized, Etisalat said there could not have been any need for such because “concerned parties have access to our books and do not require an investigation into how the loan sum was utilized. All of the infrastructure investment and services for which the loan was secured, were paid through our banks and these are verifiable”.