Now this is what I call a ‘hostile takeover’ – or about to.
According to reports on The Nation, a couple of banks in the country may have to take over the management of Etisalat over unpaid loans. The said report did not state specifically how much was borrowed, but it did specify that Etisalat had already started lobbying the Central Bank of Nigeria and the Nigerian Communications Commission (NCC) to prevent the takeover.
So basically, Etisalat borrowed funds – loans – from some banks and paid part of it, but still haven’t paid all. Now, the banks would have to take over the company’s management. Sounds like a good deal for the banks.
Now, the Bank executives have to wait until today when the “cure period” – a time frame of 30 to 90 days during which a company that has gone into technical DEFAULT on a contractual payment is permitted to submit payment without further prejudice, and without being considered to have defaulted. Also known as GRACE PERIOD.- will end.
But then, as we would expect, a source close to Etisalat denied any plans by the bank to take over the Telco, insisting that its management was intact, and working round the clock to offer quality services to its over 20 million customers across the country.
According to him, “Yes, we raised funds from a consortium of banks about two years ago in the country. We have been making conscious efforts to repay the debts and we have indeed repaid part of it. We are engaging with the banks, negotiating with them with a view to coming out with a method of repaying the loan.
Despite the few competitors and competition in the telecom market in Nigeria, I still find it hard to believe that a company would be unable to pay loans. I mean, the most threats they get is from the other three telecommunication coys, MTN, Globacom and Airtel.
With this, I want to believe that when our clamor for more telecommunication companies – to drive down price of data – to penetrate the market is heard, some of these ones ruling now would be driven to the ground.
But come to think of it, don’t you think the take over should be successful? At least, we’ll see if the new management would reduce the price of data. *grins*