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Etisalat plans to pull out of Nigeria in three weeks

Etisalat is set to phase out the telecom group’s brand in Nigeria,
Hatem Dowidar, the chief executive of Etisalat International, said on
Monday.

AKINZGIST reports that efforts by Nigerian Telecom regulator to
save Etisalat Nigeria from collapse leading to talks with its lenders to
renegotiate a $1.2 billion loan failed.

Earlier in June, Etisalat, with a 45 percent stake in the Nigerian
business, had been ordered to transfer its shares to a loan trustee
after the talks failed.

On Monday, Mr. Dowidar said all UAE shareholders of Etisalat Nigeria,
including state-owned investment fund Mubadala, had exited the company
and left the board and management.

Speaking in an interview with Reuters, he disclosed that discussions
were ongoing with Etisalat Nigeria to provide technical support, adding
that it could continue to use the brand for another three-weeks before
phasing it out.

“There’s a new board and we are not part of that company. We have
sent our termination letter for the management agreement,” the Etisalat
boss said on Monday.

Etisalat Nigeria took-out a $1.2 billion loan with 13 local lenders
in 2013 to refinance an existing loan and fund expansion, but struggled
to repay four years later.

Mr. Dowidar said parent Etisalat had written down the value of the
Nigerian business on its books and that transferring its 45 percent
stake to the lenders after loan renegotiation talks collapsed had no
impact on the group.
When asked whether Etisalat would consider entering Nigerian market again, Mr. Dowidar dismissed the possibility of such move.

“The train has left the station on that one. Being in that market as
an investor … are we willing to risk more money compared to the reward
for the long-term?” he asked.

“(Nigerian) lenders may try to continue to operate the company until
they find a buyer (or) they may merge the company with the existing
players in Nigeria”, he said.

“The brand agreement in either of these two scenarios won’t be a
long-term thing, so we take out the brand; in the long term Etisalat
won’t be in Nigeria.”

The Etisalat boss explained that the company had been unsuccessful at
converting some of its dollar debt to local Nigerian currency, adding
that the group might exit or merge with a local rival in markets where
it was not one of the top two players.

He, however, did not specify which markets.

Etisalat is among the top two in markets such as the UAE, Saudi Arabia, Morocco, Egypt and Afghanistan.

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