Union Bank says it has stamina to withstand 9mobile’s debt

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Union Bank says it has stamina to withstand 9mobile’s debtUnion Bank says it has stamina to withstand 9mobile’s debt

Union Bank, a local lender with over 30% stake owned by Bob Diamond’s Atlas Mara is owed about NGN3.9 billion which is approximately USD10.69 million using real-time exchange rate by 9mobile, formerly called Etisalat Nigeria.

The bank said it is looking at raising local capital to the tune of NGN50 billion through a local rights issue. Atlas Mara has not made any statement whether it will participate in the proposed issue.

Other banks owed in the deal are GTBank with USD138 million and Access Bank with USD31 million are the most exposed to the company’s loan portfolio that has disrupted its ownership structure.

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Other lenders who are owned in the debt arrangement are Zenith Bank, First Bank, UBA, Fidelity Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank. There were concerns as to whether affected lenders will make provisions for impairments in their books as a result of the non-performing loan. This was said to be the main reason, the Central Bank of Nigeria got involved in the matter to ensure 9mobile’s default does not end to be a systemic risk to the financial markets.

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First Bank, a subsidiary of FBN Holdings PLC said through its chief executive that the bank will wait for 9mobile to get new investors.

In an analyst conference call monitored by Thomson Reuters, Adesola Adeduntan said:

“On the part of lenders, we are trying to reposition the company till we find new investors. With the level of cash flow we believe there will be no need for impairment.”

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It would be recalled that Etisalat Nigeria entered troubled waters after it was unable to meet up with the repayment of its USD1.2 billion debt it owed a consortium of 13 local banks and other international lenders. Mubadala Development Company PSJC, a 45% shareholder and Etisalat.

(PageOne)

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Union Bank says it has stamina to withstand 9mobile’s debtUnion Bank says it has stamina to withstand 9mobile’s debt

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Union Bank says it has stamina to withstand 9mobile’s debtUnion Bank says it has stamina to withstand 9mobile’s debt

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