By Goddy Egene
Some shareholders ofÂ Â banksÂ involved in theÂ N541.8 billionÂ Â debt owed byÂ Etisalat NigeriaÂ Â have advised against writing off the loan, saying that writing off the loan will not only send wrong signals to otherÂ Â debtors but will also affectÂ Â returns on their investments.
In 2013, Etisalat secured a 7-year $1.2 billion syndicated facility from a consortium of banks. However, the telecommunication firm has failed toÂ meet its financial obligations, prompting the banks to commence moves toÂ recover their money.Â Â Â The banks had given an option to convert the debt into equity but shareholders of the Etisalat preferred restructuring of the debt.Â Â While the Central Bank of Nigeria (CBN) and the Nigerian Communication Commission (NCC)Â are mediating toÂ resolve the matter, shareholders of the banks, who spoke to THISDAY at the weekend said the option of classifying the loan as bad and thereafterÂ write off should notÂ come up.
According to the shareholders, efforts should be made for the company to repay the loan.
The President, Association for the Advancement of the Rights of NigeriaÂ Shareholders, Dr.Â Faruk Umar,Â saidÂ Â the loan can only be written off if there are no recoverable assets.
â€œBut Etisalatâ€™s network is one of the best and the banks should get a reputable foreign service provider to offset the loan and take over the management ofÂ the companyÂ as the banks cannot operate the network.Â Â Hakeem Belo-Osagie is one of the best brains we have in this country and I cannot understand why he failed to list the company on the stock exchange, which would haveÂ givenÂ Â Etisalat the opportunityÂ Â to reduce the loan,â€ Umar said.
Chairman Ibadan Zone Shareholders Association, Mr. Eric Akinduro,Â said it was a business transaction that must have condition beforeÂ the engagement and agreements must have been put in place to take care of default in payment.
â€œSo banks taking over the company did not happen overnight. Etisalat, as a company, knew quite alright that such a thing will happen. Banks cannot just avoid looking at investorsâ€™ money going down the drain particularly when there is high level of non-performing loans in the banking sector. It is not a good business decision to be thinking of written off. There is no way such amount of money can be written off, is going to affect their balance sheet at the end of the year. The best thing for them is to take necessary measure to take back the loan. Virtually all the banks owe in one way or the other too and they too must pay back their loans,â€ Akinduro said.
In the opinion ofÂ Â Â Mr. Oderinde Taiwo of Proactive Shareholders Association of Nigeria,Â it is practically impossible to write off such debt.
â€œIt means they have to write offÂ every customerâ€™s debt. We are also customers of Etisalat and we do pay for its services. The company should look for a way to repay the loan,â€ Taiwo said.
Another shareholder, Mr. Adebayo Adeleke of Independent Shareholders Association of Nieria, said Etisalat is not a not-for-profit organisation, therefore the issue of debt forgiveness or cancellation cannot come in at all.