Nigerians may soon begin to get familiar with a new name in the telecommunications following indications that Orange Telecom and Vodafone are two companies in strong running to purchase 65% of Etisalat Nigeria following the departure of the United Arab Emirates-based Etisalat Group from its Nigerian business.
It has been learnt that following the debt crises that nearly caused the takeover of the brand by a consortium of 13 Nigerian Banks led by Access Bank Plc, no fewer than five companies have indicated interest to take buy over the shares of the company. But sources close to the company suggested that only Orange and Vodafone have shown what was described as “concrete interests” in the takeover of the troubled company.
Already, our source said, discussion with the two companies are at advanced stages with only the restructuring of the over N370 billion debt as the major snag.
Negotiators for Etisalat, which it was learnt, include the Chairman of the company, Akeem Bello Osagie, Representatives of the 13 creditor banks and representatives of the Central Bank of Nigeria and the Nigerian Communications Commission, are working hard to expedite discussions to mitigate any collateral damage and brand erosion that may compromise the business of the future owners.
It was also learnt that the banks are ensuring a workable repayment plan is extracted from the would-be new owners.
What is not clear is whether the two companies are coming from the banks or from Akeem Bello Osagie’s Mudaballa Holdings. However, it was learnt that providing maximum comfort for the banks with an agreeable repayment plan is top of the discussions.
The discussion, it was also understood, is factoring the huge costs for rebranding that may take a huge chunk of capital in the first one year after the takeover.
Of the two companies, Orange seems to have had some issues in its in African operations and the issues it had in Kenya where it sold its assets in Kenya Telekom stands to private equity firm Helios Investment Partners may be strong consideration against it.
Orange completed the sale in settlement of an agreement originally signed in November 2015 between the two companies and following the agreement of the Kenyan authorities.
Orange, which then was the second international operator to exit from Kenya, after an earlier exit by Safaricom, had tried in November 2014 to sell its majority shareholding in Telkom Kenya to Vietnamese telecom firm Viettel, but this attempt failed when the Kenyan government rejected a number of Viettel’s conditions.
Vodafone on its part has had significant experience in Africa, It is already in Nigeria where it has been providing technology services to companies.
Recently, the comoany was reported to be working to consolidate some of its operations in sub-Saharan Africa into a single entity as part of its “single, coordinated Africa strategy”.
It has operations in Lesotho, Mozambique, Tanzania and the Democratic Republic of Congo with other assets in other African countries like Ghana, Ethiopia and Kenya.
The Nigerian arm of Abu Dhabi telecom group Etisalat met lenders in London yesterday for talks on restructuring a $1.2 billion debt, Access Bank CEO Herbert Wigwe has revealed.
Etisalat’s fairy tale run in the Nigerian market began to thaw when news of its indebtedness to a consortium of banks leaked.
The company, hitherto the brand to beat by other operators in Nigeria, had signed a $1.2 billion medium-term facility with 13 local banks in 2013 to refinance a $650 million loan and fund the modernisation of its network, but is now struggling to repay the debt.
Access Bank, one of the lenders in that consortium, is owed N40 billion ($131 million) by Etisalat Nigeria and more by its contractors.
Efforts by the Nigerian Communications Commission and the Central Bank of Nigeria to mediate in the crises was unsuccessful as the banks held their grounds, forcing the Dubai-based company to beat a retreat from the Nigerian market.
It was reported to have informed the Abu Dhabi Securities Exchange that a group of Nigerian commercial banks have refused to agree to the restructuring of 541 billion Naira debt owed by the company, claiming in a statement that it had transferred its shares in Etisalat Nigeria to United Capital Trustees Limited.
Abu-Dhabi based Etisalat group established Etisalat Nigeria with effective 45 per cent and 25 per cent ordinary and preference shares respectively.