Etisalat Nigeria Debt Crisis Throws Nigerian Banks Into Confusion
So, 2017 has gone half and it is time for banks to prepare their half-year results.
But some of them that lent money to Etisalat - which the company had been unable to repay - are not quite sure what to do about the debt in their half year financial results.
They do not know whether to set aside the money as an expense for the uncollected loan until they can work out its value.
A banking source told Reuters on Wednesday that the banks first wanted to determine Etisalat Nigeria's free cash flow to help them value the telecoms business before deciding on whether to consider the loan a bad business or hold on to find new investors.
"No bank is talking about restructuring now, but it might get to that later once we are able to ascertain the true value of the company," the source said.
Nigerian regulators intervened last week to save Etisalat Nigeria, the country's fourth-largest mobile operator, from collapse and prevent lenders placing the telecoms firm in receivership, prompting a board and management change.
On Thursday, Etisalat Nigeria changed its name to 9mobile, the company said.
The telecoms firm took-out a $1.2 billion loan four years ago from 13 local lenders to refinance an existing debt and expand its mobile network, but it struggled to repay due to dollar shortages and recession that gripped Nigeria since 2016.
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.
"We think that by the time the new management settles in, makes some changes and reduces costs, the company might bounce back," the source told Reuters, adding that he expected support from the central bank, which has sought to avoid Etisalat Nigeria's collapse from sparking a wider debt crisis.