The crisis confronting debt-ridden Etisalat, one of Nigeria’s biggest telecom companies, took a disturbing turn yesterday, with the Central Bank of Nigeria (CBN) urging a consortium of banks to which Etisalat is indebted to the tune of over $1.2 billion to stop putting pressure on the telecom company.

Two banking sources, including one present at yesterday's meeting between CBN Governor, Godwin Emefiele, and representatives from five bank lenders, said bankers were surprised at what struck them as the level of connivance between Etisalat and the highest officials at Nigeria's regulatory bank. One of the bankers accused the CBN of demanding that they keep silent instead of telling their side of the story.

Leaders of First Bank, FCMB, Zenith Bank, Access Bank and others have been jittery ever since Dubai-based Mubadala Development Company of the United Arab Emirates, the company’s largest shareholder, pulled out 70% of their shareholding structure as attempts to restructure the huge loan failed.

One Nigerian bank source said Etisalat made a bizarre proposal to be allowed to pay a mere 10% of the subsisting loan and be forgiven the rest.

The banking sources said they countered with a plan in which Etisalat would convert its unserviced loan to equity so that more investment could be brought in to solidify the telecom firm's capital base. Our sources said Etisalat resisted the creditor-banks' proposal.

SaharaReporters learned that the bankers who met with the CBN Governor proposed that criminal investigations be conducted to determine how Etisalat might have diverted loans to other uses not related to the business for which the huge loan was obtained. The bankers accused Mubadala Development Company of the United Arab Emirates of walking away from their obligations, adding that the company had pulled off a similar maneuver in Tanzania and India.

The bankers insisted that the Dubai-based firm acted in a suspicious manner and might have capitalized on Nigeria’s weak financial governance structure.

They also accused the Nigerian Communication Commission (NCC) of staying aloof until the situation degenerated.

Etisalat has more than 20 million local subscribers to in its network in Nigeria. To its credit, the company provides some of the better networks and data services in Nigeria.

A major analyst in Nigeria's telecom sector said Etisalat was making excellent margins of profit until 2015 when its financial system began to operate under the radar, a possible indication that the firm wished to avoid paying huge debts to a consortium of Nigerian banks.

In addition to the banks, Etisalat also reportedly owes significant sums to several vendors and suppliers. The company's services remain in place despite the recent financial blowout with its lenders.

In a press statement issued earlier today, Etisalat's Vice President, Ibrahim Dikko described calls for anti-corruption agencies to look into the telecom firm's books as unnecessary, insisting that the company had nothing to hide.

Mr. Dikko stated that, contrary to media reports, the outstanding amount the company owes to the consortium of banks was $557million. He blamed Etisalat's current financial condition on the economic recession that hit Nigeria
in 2015 which led to a spiraling of the value of the naira. He said the economic downturn made it difficult for the company to service its dollar-denominated loans.

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