The consortium of banks that lent Etisalat $1.2 billion may have decided to make provisions on the loan. Zenith bank, which is part of the consortium said it had decided to make a 30% provision for the loan and indicated that other banks could follow suite.
Executive Director of Keystone bank, Mr Richard Obire was of the opinion that the level of provisioning the banks would make for the loan, was dependent on how profitable they were. The banks involved could decide to make a conservative provision of 10% or go higher.
The banks are being proactive.
Though Etisalat Nigeria has maintained it remains in a robust financial state, the road to stability for the telco is a very long one. A new investor will most likely ask for a review of the terms of the loan. The banks may also be taking advantage of the robust profits they are currently making to write down the loans, as it would have less of an effect.
Etisalat Nigeria had few months ago defaulted on a $1.2 billion loan, which prompted the banks to threaten a take over. The Centra Bankof Nigeria (CBN) and National Communications Commission had to step in, with the apex bank instructing the lenders not to take anhy further action. The majority investors in the firm Etislat of the UAE and Mubadala severed ties with the firm, prompting a change in management and name to 9 Mobile.
CBN governor, Godwin Emefiele during remarks made at the last MPC meeting, said the telco would have a new investor by year ending and that regulators had to step in due to the strategic position the company occupied in the economy.