Editor’s Note (July 13 2017): Etisalat Nigeria has re-branded to 9Mobile. Read here
Etisalat brand will cease to be operational in Nigeria, within three weeks, reports Premium Times
Etisalat is set to phase out the telecom group’s brand in Nigeria, Hatem Dowidar, the chief executive of Etisalat International, said on Monday.
On Monday, Mr. Dowidar said all UAE shareholders of Etisalat Nigeria, including state-owned investment fund Mubadala, had exited the company and left the board and management.
This is the moment for Airtel or Glo to take action. MTN Nigeria cannot do that owing to its pending debts with the Nigerian government and also the fact that it is #1. Looking at new statements from the company, Etisalat is extremely diluted. This is captured by the statement credited by its parent company.
Mr. Dowidar said parent Etisalat had written down the value of the Nigerian business on its books and that transferring its 45 percent stake to the lenders after loan renegotiation talks collapsed had no impact on the group.
Etisalat Nigeria has a pending $680 million in this loan; it had repaid a big portion of it. Does it mean that its parent wants to abandon it for just $680 million? This does imply that Etisalat Nigeria will have to work harder to find a buyer that will give it much higher value. If the parent writes off 45% of the company for it owing $680 million, it means it thinks the 45% of the company is not worth the trouble saving, by pumping extra $680 million.
Update: Etisalat Reacts – Emerging Markets Telecommunication Services Ltd. EMTS, on Monday said it would consolidate on its Nigerian identity in spite of Etisalat Group’s withdrawal from the Nigerian market.
“Indeed, discussions are ongoing between EMTS and Etisalat Group pertaining to the continued use of the brand, and EMTS will issue a formal statement once discussions are concluded …The final outcome on the use of the brand in no way affects the operations of the business as our full range of services remain available to our customers,”
The implication is thus: Anyone that brings $680M could in theory take 45%. That is the opportunity cost the parent parted by abandoning the firm. This implies, currently, Etisalat Nigeria, is worth less than $1.5 billion.
Glo, this is your moment.