A group of Nigerian banks has agreed to an extension of a $1.2 billion loan made to 9mobile, formerly Etisalat Nigeria, pending when the mobile operator’s finds new investors, FCMB bank says on Thursday.
Nigerian regulators stepped in last month to save Etisalat Nigeria from collapse and prevent lenders placing the country’s fourth biggest telecoms group into receivership, prompting a board, management and name change.
Etisalat Nigeria took out a $1.2 billion loan four years ago from 13 local banks to refinance existing debt and expand its mobile network, but it struggled to repay due a currency crisis and a recession in Nigeria.
FCMB, which is owed N4.5 billion by the telecoms group, said lenders had put a hold on taking provisions on the debt and that they were working with the regulators. “In terms of provisioning, there is hold on that.
What we have agreed is an extension and we have agreed to extend pending the sale to new investors,” the bank told an analysts call, after it published half-year results. The banks, many of which are reporting first-half results, have been trying to work out the value of 9mobile before deciding whether to impair the loan or wait until the company finds new investors.
Banks involved in the loan deal include: Zenith, GTB, First Bank, UBA, Fidelity, Access, Ecobank, FCMB, Stanbic IBTC and Union Bank. GTB Bank with $138 million in outstanding loans to 9mobile and Access Bank with $131 million are among the most exposed.