As 13 banks consider legal action over telecom
A leading Investment Analyst who works as External Consultant to the Central Bank of Nigeria (CBN), speaking on condition of anonymity, has advocated a stronger involvement of the Federal Government at the diplomatic, economic and trade relations levels as options to save Etisalat Nigeria.
According to him, government needs to reach out to the Abu Dhabi government to rein in the Directors of Mubadala and compel them to respect a contractual loan obligation they entered into in Nigeria with the consortium of banks. At the economic level, the government must provide all necessary support under its “Ease of Doing Business” policy to new investors the Emerging Markets Telecommunications Services’ team led by Hakeem Belo-Osagie may be reaching out to. Key members of the nation’s Economic Management team such as the Minister of Industry, Trade and Investment, Minister of Finance and the Central Bank Governor can be directed to join the NCC to provide all necessary concessions to enable the new investors make their decision and settle in quickly,” he counseled.
“The second leg of the proposed economic intervention is for the government to direct the Sovereign Wealth Fund to invest in Etisalat considering its continued viability as a business. Telecom is a critical national infrastructure that represents the backbone of business, economic development and even national security. The intervention of the Sovereign Wealth Fund will not only preserve the jobs of thousands of Nigerians directly employed by Etisalat Nigeria but that of scores of other Nigerians indirectly employed in the entire value chain of the Etisalat business,” he said.
Meanwhile the 13 banks that raised $1.2billion loan for mobile operator Etisalat Nigeria may press criminal charges against directors of Mubadala Development Company of the United Arab Emirates (UAE).
This is the latest option the banks are considering to recover the outstanding part of the facility.
It was gathered that the banks held a meeting at the weekend to consider engaging a London-based counsel to assemble a team of lawyers to press charges against Directors of Mubadala for abdicating their contractual obligations.
A source close to the meeting said the banks explored the legal option to save Etisalat Nigeria which they still see as a viable business. They are also said to be interested in ensuring the continuity of Etisalat Nigeria.
The source said: “The banks have a different position now. The first thing considered at the meeting is the legal option to compel Mubadala through a Mareva injunction to honour its obligations to the consortium. This is because other than this loan crisis, Etisalat is a viable business. The banks have access to theirs books and they can see that despite the crisis, Etisalat’s business value has not diminished. That is why the banks took that position that they are not interested in a takeover of the business. They are in fact more sympathetic to the Nigerian investors led by Hakeem Belo-Osagie and are willing to work with him to steady the ship and keep Etisalat business going while searching for new investors.”
The source said the lenders also felt that there was no need dissipating needless time and energy on the option of hostile takeover considering that the law is sacrosanct on that. “They realised the licence is not transferrable. So, they alternatively opted to pursue Mubadala for a recovery of the outstanding sum of money from the loan. The banks are said to be convinced of this option considering what they perceived to have been a trend with Mubadala. In each of the country where Mubadala had exited, it left behind burdens of unpaid loans,” the source added.
Another source close to one of the lenders who corroborated the development, said: “The banks rose from their weekend meeting with a strong resolve that Mubadala may have tried this trick with the wrong customers this time around. Yes, I can confirm they will press charges.