The banks involved in the Etisalat loan-gone-bad situation are asking the Nigerian government to wade into the issue and carry out due diligence on what the loan was used for.

“A foreign company cannot come and ride us in Nigeria. If this issue is not handled carefully, others will do the same thing,” a source at one of the banks told the News Agency of Nigeria in Lagos on Thursday.

It is time to speak out and a management source close to the banks who do not want to be named said the rumoured takeover of Etisalat is not true.

The Rumour of Etisalat takeover had emerged after the company's Nigeria office said it had started changing its ownership structure.

The company had said that negotiation with the banks to restructure a $1.2 billion-loan had failed.

Etisalat had been in talks with Nigerian banks to restructure the loan after missing repayments but those discussions failed to produce an agreement.

But the banks are claiming that the rumoured take over was not its position in the matter.

The source said that the banks major interest was the repayment of the loan they had given the company and not its takeover. 

“We are not telecommunication companies, all we want is our money,” he said. 

The banks want the company to pay back the loans in order not to jeopardise the economy, jobs, payment of dividends and depositors funds.

He stated that it was not only the banks that would suffer but millions of Nigerians, even the vendors and distributors doing business with the company.

“We did not take over Etisalat as being insinuated. If we have taken over, it has to be registered with the CAC.

“They are still doing their business. They just want to weep up sentiment at the United Arab Emirates (UAE),” the source claimed.

He added that the company had about 20 million subscribers, adding that any interruption would affect many businesses, especially SMES.

According to the source, the affected Nigerian banks are owed about $570 million out of the $1.2 billion syndicated loan with the balance being owed vendors and distributors, among others.

The source said that Etisalat wanted to pay only 10% of the loan borrowed and requested that others should be written off as non-performing loan.

He also claimed that Etisalat wanted the consortium of banks to pay $50 million out of $570 million being owed, which the banks rejected.

The source highlighted that the banks had practically reduced the debt to between 20% and 30% at a discounted interest rate of 6% below the market rate which was rejected by Etisalat.

“All we are requesting is for the Federal Government to wade into the issue and carry out due diligence on what the loan was used for," the source said.

"The company was avoiding negotiations which made the affected banks to fly to London earlier in the year to have a discussion with a company with its office in Nigeria.

The source further explained that the company was advised earlier before Naira devaluation to convert the foreign loans to local currency due to fall in oil price at the global market, which it also rejected.

In the last few months, Etisalat Nigeria had had talks with Nigerian banks to restructure a 1.2 billion dollars loan after missing repayments.

The loan is a seven-year facility agreed with 13 banks in 2013 to refinance a $650-loan and fund expansion of the telco’s network.

 The Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) had stepped into the fray to prevent a takeover by the banks, those discussions failed to produce an agreement on restructuring the debt.

One area of this loan facility that Nigerians are yet to look at is the financial implication of the 'loan-gone-bad' situation to the 13 banks and its multiplier effect on Nigerians who have their monies in those banks.