Etisalat Set To Pull Out of Nigeria In Three Weeks
Etisalat is set to phase out the telecom group’s brand in Nigeria, Hatem Dowidar, the chief executive of Etisalat International, said on Monday.
Newsmen reports that efforts by Nigerian Telecom regulator to save Etisalat Nigeria from collapse leading to talks with its lenders to renegotiate a $1.2 billion loan failed.
Earlier in June, Etisalat, with a 45 percent stake in the Nigerian business, had been ordered to transfer its shares to a loan trustee after the talks failed.
On Monday, Mr. Dowidar said all UAE shareholders of Etisalat Nigeria, including state-owned investment fund Mubadala, had exited the company and left the board and management.
Speaking in an interview with Reuters, he disclosed that discussions were ongoing with Etisalat Nigeria to provide technical support, adding that it could continue to use the brand for another three-weeks 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,” the Etisalat boss said on Monday.
Etisalat Nigeria took-out a $1.2 billion loan with 13 local lenders in 2013 to refinance an existing loan and fund expansion, but struggled to repay four years later.
Mr. 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.
When asked whether Etisalat would consider entering Nigerian market again, Mr. Dowidar dismissed the possibility of such move.
“The train has left the station on that one. Being in that market as an investor … are we willing to risk more money compared to the reward for the long-term?” he asked.
“(Nigerian) lenders may try to continue to operate the company until they find a buyer (or) they may merge the company with the existing players in Nigeria”, he said.
“The brand agreement in either of these two scenarios won’t be a long-term thing, so we take out the brand; in the long term Etisalat won’t be in Nigeria.”
The Etisalat boss explained that the company had been unsuccessful at converting some of its dollar debt to local Nigerian currency, adding that the group might exit or merge with a local rival in markets where it was not one of the top two players.
He, however, did not specify which markets.
Etisalat is among the top two in markets such as the UAE, Saudi Arabia, Morocco, Egypt and Afghanistan.
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