Etisalat Nigeria has been in talks with the 13 banks it owes $1.2 billion which translates to about 541.8 billion Naira.

The company says negotiations with the commercial banks has made significant progress.

Sources told Reuters on Tuesday that talks had reached a deadlock but the banks are under pressure to avoid loan-loss provisions.

The money lenders are pushing to finalise the restructuring before next month's half-yearly audit.

"Discussions are not only ongoing with our bankers, but good progress has been made so far," said Ibrahim Dikko, Etisalat Nigeria's vice president, Regulatory and Corporate Affairs.

"We are optimistic that an agreement will be reached shortly."

Etisalat is Nigeria's Number 4 mobile operator, with 20 million subscribers and 14% percent market share.

The company is the biggest foreign-owned victim of the dollar shortages plaguing Nigeria’s financial system.