NCC wades into banks planned takeover of Etisalat Nigeria

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Moves by a consortium of 13 Nigerian and foreign banks to take over the management of Etisalat Nigeria may have met a regulatory hurdle. The Nigerian telecom ombudsman, Nigerian Communications Commission (NCC) has warned that telecom licenses are not transferable and only licensees, not third parties may be operators of telecom licensees.

 

By Anthony Nwosu and Oluwatobi Opusunju

The telecom regulator emphatically stated in a statement signed by its Director of Public Affairs, Mr. Tony Ojobo that license is not transferable even as it assures subscribers of network integrity of Etisalat.  The statement avers:

“Accordingly, the Commission has drawn the attention of the banks to provisions of the Nigerian Communications Act (NCA) 2003 Section 38:

Subsection 1 – The grant of a license shall be personal to the licensee and the license shall not be operated by, assigned, sublicensed or transferred to another party unless the prior written approval of the commission has been granted;

Subsection 2 – A licensee shall at all times comply with the terms and condition of the license and the provision of this Act and its subsidiary legislation.”

The banks planned to effectively take over Etisalat Nigeria today, June 15. While an outright takeover is precluded under the Communications Act, what is certain is that barring any regulatory hiccup, the ownership structure of Etisalat Nigeria would be altered to accommodate the consortium which includes Guaranty Trust Bank Plc and Access Bank Plc.

Talks between Emerging Markets Telecommunications Services (EMTS), which operates as Etisalat Nigeria and is promoted by businessman Hakeem Bello-Osagie, and lender-banks to restructure its $1.2bn (N541bn) loan had failed. Having failed to secure a loan restructuring, Etisalat Group, the parent company of Etisalat Nigeria, announced the planned takeover yesterday in a filing to the Abu Dhabi Securities Exchange in Abu Dhabi, United Arab Emirate.

The filing, with reference number Ho/GCFO/152/85, and dated June 20, 2017, signed by Etisalat Group Chief Financial Officer, Serkan Okandan, states:

“Further to our announcement dated 12 February, 2017, Emirates Telecommunications Group Company PJSC, “Etisalat Group” would like to inform you that Emerging Markets Telecommunications Services Limited “EMTS” (“the company), established in Nigeria and an associate of Etisalat Group with effective ownership of 45% and 25% ordinary and preference shares respectively, defaulted on a facility agreement with a syndicate of Nigerian banks (“EMTS Lenders”).

“Subsequently, discussions between EMTS and the EMTS Lenders did not produce an agreement on a debt restructuring plan.

“Accordingly, the Company received a default and security Enforcement Notice on 9 June 2017 requesting EMTS Holding BV (EMTS BV) established in the Netherlands, and through which Etisalat Group holds its interest in the company) requiring EMTS BV to transfer 100% of its shares in the company to the United Capital Trustees Limited (the Security Trustee”) of the EMTS Lenders by 15 June 2017.

“Subsequently the EMTS Lenders extended the deadline for the share transfer to 5.00 pm Lagos time on 23 June 2017.”

Full texts of the NCC’s statement

The attention of the Commission has been drawn to a planned takeover of Etisalat by a consortium of banks.   As a result of this planned action the Commission wishes to state as follows:

  • The Commission is aware of the indebtedness of Etisalat to the consortium of banks;
  • In conjunction with the Central Bank of Nigeria (CBN), it mediated by holding several meetings with the banks, Etisalat and other stakeholders with a view to finding a resolution;
  • Regrettably, these meetings did not yield the desired results.
  • The NCC wishes to reassure the over 21 million Etisalat subscribers that it will do all within its regulatory power to ensure that Etisalat subscribers continue to enjoy the services provided by the operator.

Also Read: Etisalat Gets Reprieve From Creditor Banks As NCC, CBN Broker Talks On New Repayment Terms

The Commission has taken proactive steps to cushion the impact of the takeover, this is without prejudice to the ongoing effort between Etisalat and the banks toward negotiated settlement.

In view of the recent development, NCC wishes to reassure all stakeholders in the telecommunications sector, in particular, the subscribers on the Etisalat Network that the Commission will ensure that the integrity of Etisalat Network is not compromised.

Accordingly, the Commission has drawn the attention of the banks to provisions of the Nigerian Communications Act (NCA) 2003 Section 38:

Subsection 1 – The grant of a license shall be personal to the licensee and the license shall not be operated by, assigned, sublicensed or transferred to another party unless the prior written approval of the commission has been granted;

Subsection 2 – A licensee shall at all times comply with the terms and condition of the license and the provision of this Act and its subsidiary legislation.

Whilst the banks and Etisalat are working at resolving the issues, the Commission wishes to assure subscribers that they will continue to enjoy the services provided by Etisalat.


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