Heads Roll Over Etisalat Nigeria Debt
It is no longer news that Etisalat Nigeria made a bad calculation in obtaining a loan in dollars that is now threatening to swallow it.
Now, some people at the helm of affairs will face the consequence.
On Monday, Etisalat Nigeria Chairman, Hakeem Belo-Osagie resigned after talks to renegotiate the $1.2 billion loan collapsed, according to two company sources who spoke to Reuters.
Etisalat Nigeria has emerged as the biggest foreign-owned victim of Nigeria’s dollar shortages plaguing the country due to lower oil prices and economic recession.
It left the company struggling to make repayments to banks and suppliers since February after sharp falls in the naira bloated the loan's value, making repayments difficult.
The sources said the banks had retained Etisalat Nigeria Chief Executive Matthew Wilshire but that talks continued on the use of the Etisalat brand.
Wilshire told Reuters by phone that he was in the office on Monday and that his contract was with the Nigerian firm.
"Hakeem had been negotiating hard ... but ... it wasn't the optimal solution so he had to resign," the source said.
"The biggest mistake the company made was taking a loan in dollars. It sounded like a good idea at first," one of the company sources told Reuters.
Another source who had worked for Etisalat’s rival, MTN said Etisalat would have emulated MTN which had been sourcing loans in dollars but decided to switch to naira.
In 2015, Etisalat started to cut down dollar payments but it was late, the sources said. It restructured its business, slashed jobs and sold off its premises to IHS Towers, the mobile phone tower managers, and leased them back but also linked payments to dollars.