Etisalat Nigeria is not making money. We noted that earlier today when we used government statements to build a case that it has never made a single profit since it began operations in Nigeria in 2009. When a company cannot make profits, it survives through fresh cash injections, if it wants to grow.
Etisalat is the 4th largest telecoms operator, behind Airtel (34 million), Glo (37 million) and MTN (60 million), in Nigeria. It has real crises over loans and its inability to make profits.
The company is now entering a very challenging trajectory as its leading shareholder is pulling out. According to Premium Times, Mubadala Development Company of United Arab Emirates is cutting its loses and pulling out.
Etisalat Nigeria Limited, Nigeria’s fourth largest telecommunication firm, appears to be swimming deeper in troubled waters as Mubadala Development Company of United Arab Emirates, the company’s largest shareholder, has pulled out its investment and headed out of the country, those familiar with the matter have told PREMIUM TIMES.
Mubadala, an Abu Dhabi Government-owned investment and development company, controls about 70 per cent of the shares in Etisalat along with Etisalat UAE mobile, with Emerging Markets Telecommunications Services (EMTS, promoted by Hakeem Bello-Osagie, owning the remaining 30 per cent.
The UAE investor has hinted Etisalat Nigeria as well as the industry regulator, Nigerian Telecommunications Commission (NCC) of its decision to opt out of the joint ownership of the company, our sources said.
As early as next week, banks can take over Etisalat Nigeria. The ultimatum to pay its debts to banks expires tomorrow. Where it cannot make this payment, the banks will take over and then appoint a company that can help the consortium run the business. We do think Glo, being a Nigerian company could be appointed.
Etisalat Nigeria owns about $1.2 billion to many banks including Access Bank which led the transaction. The loan was to finance network capacities across Nigeria. However, as the economy deteriorated and profitability impossible, it became unable to service its debts.
The Central Bank of Nigeria and the telecom regulator, Nigerian Communications Communication, were both sympathetic and worked out ways to help the consortium and Etisalat Nigeria renegotiate and reschedule the loans.
According to Premium Times, the Chairman of the company, Hakeem Bello-Osagie, whose entity, EMTS, controls 30% of the firm, is yet to confirm this evolving issue for Etisalat. Nevertheless, EMTS, spokesperson noted as follows:
“I can’t confirm that information for now,” she said. “As you are aware, discussions have been ongoing for some time now with various authorities to find ways to resolve the crisis. I am not aware that that decision has been taken.”