Etisalat cuts ties with Nigerian operations
It had terminated its management and technical support related agreements with the local holding company for the Nigerian operator with effect from June 30
Etisalat has ended its management agreement with its Nigerian arm and allotted time for phasing out the use of its brand, as the UAE-based operator unwinds its troubled assets in Africa's most populous country.
The Abu Dhabi-listed operator said on Monday it had terminated its management and technical support related agreements with Emerging Market Telecommunication Services Limited (EMTS), the local holding company for the Nigerian operator, with effect from June 30.
The termination of agreements governing the use of Etisalat’s brand in the country would be deferred until July 21, the company said in a regulatory filing to Abu Dhabi’s stock exchange.
However, Hatem Dowidar, the chief executive of Etisalat International, said that Etisalat Nigeria can use the company’s brand for another three weeks before phasing it out.
Nigerian regulators intervened last week to save Etisalat Nigeria from collapse after talks with its lenders to renegotiate a US$1.2 billion loan failed.
The operator, the African country's fourth largest by number of subscribers, said last week it had appointed a new board, chaired by the central bank's deputy governor Joseph Nnanna, with Boye Olusanya as the chief executive and Funke Ighodaro as the chief financial officer.
Etisalat Nigeria was 45 per cent owned by Mubadala, an Abu Dhabi government-owned strategic investment company, 40 per cent owned by Etisalat and 15 per cent owned by MyaCynth, an investment vehicle controlled by Hakeem Belo-Osagie, a Nigerian businessman who serves as chairman of Etisalat Nigeria.
All UAE shareholders of Etisalat Nigeria have exited the company and have left the board and management, Mr Dowidar said on Monday.
EMTS’s shareholding in Etisalat Nigeria is set to be transferred to a security trustee, United Capital Trustees, but the latter has yet to complete the legal process in Nigeria, Etisalat said in its statement.
Etisalat Nigeria’s default on its loan came as a result of a sharp fall in the value of Nigeria’s naira, attributable to the collapse in the country’s oil revenues since late 2014.
The operator also fell afoul of a wide-scale disconnection process in line with a Sim registration programme mandated by the country’s regulator. The operator’s subscriber base shrank 11 per cent year-on-year to 19.5 million at the end of March.
Updated: July 10, 2017 06:57 PM