N541.8BN ETISALAT DEBT THREATENS DIVIDEND PAYOUT TO BANK SHAREHOLDERS
For the past several months, Nigeria’s fourth largest GSM provider- Emerging Market Telecommunictions Services Limited (EMTS), otherwise known as Etisalat, has been in the news. This time, it is for the wrong reason. The company has been in and out of meeting rooms with its bankers to resolve issues around a $1.3bn or N541.8bn debt to 13 Nigerian banks, which arose from a 2013 facility to refinance existing loans ($650m), while the balance was for provision of working capital and network expansion. Following the failure to resolve the matter amicably after several meetings that involved the Central Bank of Nigeria (CBN) and the National Communications Commission, regulators of the nation’s banking and telecoms industries respectively, in a bid to restructure, the loan is as good as bad and doubtful. The banks must therefore provide for the loan, with unpleasant implications for their books at the end of 2017 financials, following which they are required to make provision...