By Goddy Egene
Some shareholders of  banks involved in the N541.8 billion  debt owed by Etisalat Nigeria  have advised against writing off the loan, saying that writing off the loan will not only send wrong signals to other  debtors but will also affect  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 to meet its financial obligations, prompting the banks to commence moves to recover their money.   The banks had given an option to convert the debt into equity but shareholders of the Etisalat preferred restructuring of the debt.  While the Central Bank of Nigeria (CBN) and the Nigerian Communication Commission (NCC) are mediating to resolve the matter, shareholders of the banks, who spoke to THISDAY at the weekend said the option of classifying the loan as bad and thereafter write off should not 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 Nigeria Shareholders, Dr. Faruk Umar, said  the loan can only be written off if there are no recoverable assets.
“But Etisalat’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 of the company as the banks cannot operate the network.  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 have given  Etisalat the opportunity  to reduce the loan,†Umar said.
Chairman Ibadan Zone Shareholders Association, Mr. Eric Akinduro, said it was a business transaction that must have condition before the engagement and agreements must have been put in place to take care of default in payment.
“So 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 investors’ 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,†Akinduro said.
In the opinion of   Mr. Oderinde Taiwo of Proactive Shareholders Association of Nigeria, it is practically impossible to write off such debt.
“It means they have to write off every customer’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,†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.
