Mobile telecommunication provider, Etisalat Nigeria, on Thursday changed its brand identity from Etisalat to 9Mobile. The new brand name, which industry watches claim lacked creativity, it was gathered was decided at a meeting held in Lagos by Emerging Markets Telecommunication Services (EMTS), which had been trading as Etisalat Nigeria before the withdrawal of Abu-Dhabi-based Emirates Telecommunications Group Company (Etisalat Group) as a shareholder in the Nigerian telco.
A consortium of banks in Nigeria provided a loan of $1.2 billion to the network, which repayment became the subject of controversy leading to the pulling out of Nigeria by the UAE-based network provider. The banks that were involved in the loan deal include Zenith Bank, GT Bank, First Bank, UBA, Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank. Results are due from this month. GT Bank with $138 million in outstanding loans and Access Bank with $131 million are among the most exposed to Etisalat Nigeria.
With the adoption of the new name by the new management of the former Etisalat Nigeria, the management has already sent notification to its staff, informing them of the name change. EMTS on Tuesday had proposed the name change to its customers and assured them that the change would not affect its operations in any way.
The decision to change its brand identity of the embattled network provider was in reaction to the three weeks ultimatum by Etisalat Group to phase out the brand in Nigeria. It, however, said discussions were ongoing with its former Nigerian subsidiary to provide technical support. The Abu-Dhabi-based firm relinquished its shares in Etisalat Nigeria last month, following the inability of the Nigerian firm to repay the $1.2 billion loan it took from 13 local banks in 2013 for network expansion and upgrade. After the negotiations between the telco and its lenders failed, Etisalat Group pulled out and announced the transfer of 45 per cent of its stake and 25 per cent of its preference shares in Etisalat Nigeria to United Capital Trustees Limited, the legal representative of the lending banks.
Two other investors – Mubadala Development Company which holds a 40 per cent stake in Etisalat Nigeria and EMTS, representing the Nigerian shareholders, with 15 per cent stake – have remained committed to the Nigerian telco despite its debt crisis. But even as Etisalat Nigeria moves forward with a new brand identity, its rescue has put its lenders in a quandary as they prepare for half-year results due this month. Most crucially, the banks do not know whether to provision for loans to the company until they can work out its value.
A banking source told Reuters that the lenders first wanted to determine Etisalat Nigeria’s free cash flow to help them value its business before deciding on whether to impair the assets on their balance sheets or hold on to find new investors. “No bank is talking about restructuring now, but it might get to that later once we are able to ascertain the true value of the company,” the source told Reuters. Nigerian regulators intervened last week to save Etisalat Nigeria, the country’s fourth-largest mobile operator, from collapse and prevent lenders from placing the telecoms firm in receivership, prompting a board and management change.
