Obinna Chima with agency report
A group of Nigerian banks has agreed an extension to a $1.2 billion loan made to 9mobile, formerly known as Etisalat Nigeria, pending the mobile operator finding new investors.
Reuters quoted First City Monument Bank (FCMB) to have disclosed this on Tuesday.
Nigerian regulators stepped in last month to save Etisalat Nigeria from collapse and prevented lenders placing the countryâ€™s fourth biggest telecoms group into receivership, prompting a board, management and name change.
Etisalat Nigeria took out a $1.2 billion loan four years ago from 13 local banks to refinance existing debt and expand its mobile network, but it struggled to repay due to currency crisis and recession in Nigeria.
Â FCMB, which is owed N4.5 billion by the telecoms group, said lenders had put a hold on taking provisions on the debt and that they were working with the regulators.
â€œIn terms of provisioning, there is hold on that. What we have agreed all is an extension and we have agreed to extend pending the sale to new investors,â€ the bank told an analysts after it published half-year results.
The banks, many of which are reporting first-half results, have been trying to work out the value of 9mobile before deciding whether to impair the loan or wait until the company finds new investors.
Banks involved in the loan deal include: Zenith Bank, GT Bank, First Bank, UBA Â Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank.
GTBank with $138 million in outstanding loans to 9mobile and Access Bank with $131 million are among the most exposed.
9Mobileâ€™s Chief Executive, Boye Olusanya, told Reuters he was focused on getting the telecoms group back on track to make a profit, while working on the paperwork to eventually raise new capital.
He has also asked the telecoms regulator for concessions on spectrum and foreign exchange access to help shore up revenues.
The telecoms group has asked Citigroup and Standard Bank to find an investor to buy into the firm and three companies have shown interest, a banking source close to the deal had said.
The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, had last week explained that the CBNâ€™s role in the 9Mobileâ€™s (formerly Etisalat) debt crisis was aimed at safeguarding the interest of over 20 million subscribers and more than 4,000 employees of the network operator.
Â Emefiele said CBNâ€™s intervention alongside the regulator in the telecommunications sector â€“ Nigeria Communications Commission (NCC) â€“ was worth the while, considering the ripple effect not doing so would have had on major stakeholders in particular and the economy as a whole.
Emefiele had also said with a subscriber base in excess of 20 million and a workforce of more than 4,000, any likely adverse impact, directly or indirectly, would have been enormous to bear by the subscribers, workers and their dependants.
â€œItâ€™s important that we donâ€™t just allow any creditor to hurt any other stakeholder,â€ he said, adding that the NCC had observed that the attempt by the creditors to take over the telcoms company was going to jeopardise the interest of the over 20 million subscribers and more than 4,000 workers.
â€œThat was why the NCC, supported by the CBN, decided to intervene,â€ Emefiele said, noting that the intervention had been positive.
According to him, 9Mobile has not only retained its subscribers but also the entire workforce while the companyâ€™s operations have continued and revenue sustained.
He stated that the interim board would not exceed 180 days as efforts were underway for a new investor to acquire the company.