Nairametrics|Talks between telecoms operator Etisalat and the consortium of Nigerian banks has ended in a deadlock. Etisalat held the meeting with a consortium of Nigerian banks in the United Kingdom.
Here is what we know so far;
Etisalat Nigeria is owing the banks $1.2 billion.
Etisalat took the loan to refinance an already existing loan and fund expansion of its network. To avoid a banking sector turmoil and a breakdown in investor confidence, the CBN decided to intervene, choosing a debt restructuring over a receivership.
A tripartite meeting between the CBN, Consortium of banks and Etisalat was immediately setup culminating in this meeting in the UK.
Update from the meeting in the UK
Etisalat missed payments leading to a meeting between the consortium of banks and Etisalat.
Reuters reported that Etisalat met with the lenders in London on April 28, in a meeting led by Guaranty Trust Bank
Banks insist that their preferred option is for Etisalat to get their parent company to inject equity into their Nigerian subsidiary.
Etisalat Abu Dhabi, which owns 45% in their Nigerian subsidiary, is adamant to inject any more capital considering that it had already written down $50 million
The on the other hand are unwilling to take more haircut on their loans. Doing so will increase the size of their impairments which are already at a record high. The Central Bank of Nigeria (CBN) has capped impairment sizes to 10% of loan book for banks. An increase beyond that means banks have to either raise capital or cut back on dividend payments.