Central bank intervenes to help bail-out Etisalat Nigeria

It all seems to be going horribly wrong for Nigeria’s fourth mobile operator Etisalat Nigeria, such that the country’s central bank has had to come to the rescue.

Multiple newspapers, including Reuters, have been monitoring the developing situation. It seems EN’s financial position has been dicey for some time and last month it tried to renegotiate its debt with a consortium of banks, a process that apparently included the possibility of the banks taking ownership of the operator.

On 20 June the Nigerian Communications Commission announced it, together with the Central Bank of Nigeria had mediated meetings between the stakeholders but those failed to yield the desired results. The rest of the announcement sought to reassure EN’s 21 million subscribers that it was business as usual and that it still hoped a resolution would be found.

Subsequent reports suggested the banks were never interested in taking over EN and suggested that its parent company was looking to ditch the company without meeting its obligations. Last Friday it was reported that EN’s Chairman had resigned, soon followed by the CEO and CFO. By this morning all three of them had been replaced and there was talk of other international operator groups, including Orange and Vodafone, sniffing around the stricken remains.

The Reuters report says the central bank hasn’t invested any funds but has ‘provided reassurances’ to the banks to encourage them to persist with the debt renegotiation process. It’s hard to imagine those reassurances could amount to an explicit underwriting, so it remains to be seen whether the Nigerian tax payer will be entirely protected from these shenanigans.