As I posted earlier(here), Etisalat was going to leave Nigeria, but I was not shre if it was going to be like the Zain to Airtel transition, or the NITEL removal. Now, it’s clear that proir to the change of their board of directors right after Etisalat severed its tiers with Etisalat Nigeria after an unpaid incurred debt, Etisalat would now be going by the name – 9mobile!
I don’t have the 9mobile logo yet- This information is still fresh. Newsmen gathered that Olusanya who was appointed as the chief executive officer of Etisalat Nigeria to oversee the transition of the company due to his experience in the smooth transition of Celtel to Airtel may have come with this new name considering the need for a change of name.
ThisdayLive has a detailed reports of the meeting.
The new brand name was decided at a meeting held in Lagos by Emerging Markets Telecommunication Services (EMTS), which had been trading as Etisalat Nigeria before the withdrawal of Abu-Dhabi-based Emirates Telecommunications Group Company (Etisalat Group) as a shareholder in the Nigerian telecommunications.
EMTS on Tuesday had proposed the name change to its customers and assured them that the change would not affect its operations in any way.
Although EMTS was yet to officially make the name change known to the public, sources close to the network operator said EMTS does not intend to announce the change with much fanfare.
Etisalat Nigeria had said it would soon change to a new brand identity that would reflect its new aspirations and philosophy.
But even as Etisalat Nigeria moves forward with a new brand identity, its rescue has put its lenders in a quandary as they prepare for half-year results due this month.
Most crucially, the banks do not know whether to make provision for loans to the company until they can work out its value.
A banking source told Reuters that the lenders first wanted to determine Etisalat Nigeria’s free cashflow to help them value its business before deciding on whether to impair the assets on their balance sheets or hold on to find new investors.
“No bank is talking about restructuring right now, but it might get to that later once we are able to ascertain the true value of the company,” the source told Reuters.
Nigerian regulators intervened last week to save Etisalat Nigeria, the country’s fourth-largest mobile operator, from collapse and prevent lenders from placing the telecoms firm in receivership, prompting a board and management change.
Banks involved in the loan deal include Zenith Bank, GT Bank, First Bank, UBA, Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank. Results are due from this month.
GT Bank with $138 million in outstanding loans and Access Bank with $131 million are among the most exposed to Etisalat Nigeria- What a whopping figure!
“We think that by the time the new management settles in, makes some changes and reduces costs, the company might bounce back,” the source said, adding that he expected support from the central bank, which has sought to avoid Etisalat Nigeria’s collapse from sparking a wider debt crisis.
The banks collected half of their interest payment for May from Etisalat so that the new team running the company has funds to keep it operating, the source said.
And any provisioning may not kick in until the next quarter.
“Given the understanding that Etisalat’s debt was performing till the end of the first quarter we believe the banks … might be required to make provisions in the second quarter,” Head of Research at Vetiva Capital Olalekan Olabode said.
“Rather than converting the debt to equity, we expect to see a restructuring in the near term,” he added.
So, hopefully, 9mobile would be able to efficiently clear the debts in this term.
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