majekdom2:
yea rite. But common sense should tell organisations accounts payable is better done in Naira since earnings are in Naira considering the exchange rate. They won't have to feel this burden this much.

They collected the loan in dollars. And the agreement was that, they were going to pay according to the exchange rate. Banks will never allow repayment to be done in Naira or the exchange rate as at the borrowing time.
I guess Etisalat were too desperate to sign off the agreement then. Little home work was done on this. Anyway, nobody ever saw this Buharinomics coming. Not even the native doctor in my village.

Undoubtedly, the most reliable network in Nigeria. Etisalat Nigeria must not be allowed to die like that or be acquired by a $hitty network like GLO.

OrangeDream:
They collected the loan in dollars. And the agreement was that, they were going to pay according to the exchange rate. Banks will never allow repayment to be done in Naira or the exchange rate as at the borrowing time.
I guess Etisalat were too desperate to sign off the agreement then. Little home work was done on this. Anyway, nobody ever saw this Buharinomics coming. Not even the native doctor in my village.

don't be too sure. What makes you think so? Loans like these don't go without certain agreement. Etisalat would be silly to sign an agreement on a facility that can't be restructured or re-negotiated. Do you know how many loans are bad loans, do you know how many loans are restructured yearly, yet they don't get escalated? The banks will be silly to think they will get their money back almost immediately should an investor take over. Even if they sell all the assets, it can't pay the loan.

Na to port back to Mtn sharpaly

Should Etisalat go, this will really dent the image of the APC government. Infact, their fate would be sealed with this development.

majekdom2:
don't be too sure. What makes you think so? Loans like these don't go without certain agreement. Etisalat would be silly to sign an agreement on a facility that can't be restructured or re-negotiated. Do you know how many loans are bad loans, do you know how many loans are restructured yearly, yet they don't get escalated? The banks will be silly to think they will get their money back almost immediately should an investor take over. Even if they sell all the assets, it can't pay the loan.

I fully understand your point here.But the banks are the guys with the greedy eyes here. They want to maximize the current exchange rate of the dollar to the naira to their full benefit and profit here. This is business for them and Etisalat obviously didn't see it coming. And true to your statement, there ought to be a restructuring re-payment option. But unless and until we see the document of the loan conditions, we can only keep guessing and analyzing the situation here.
I have seen banks shift the goal post several times in the course of this loan issue.. Bank of Industry is particularly guilty of this and you really must be a prophet to see tomorrow before you can collect their loan.
Plain and simple, confiscation of asset is what easily come to play as an option of getting back their money which is always included as collateral.

Eti Baba is coming with a bomb to blow your mind hang on

The Dubai investors have carried our money back to their country. Bring back our loan.

OrangeDream:
I fully understand your point here.But the banks are the guys with the greedy eyes here. They want to maximize the current exchange rate of the dollar to the naira to their full benefit and profit here. This is business for them [/b]and Etisalat obviously didn't see it coming. And true to your statement, there ought to be a restructuring re-payment option. But unless and until we see the document of the loan conditions, we can only keep guessing and analyzing the situation here.
I have seen banks shift the goal post several times in the course of this loan issue.. Bank of Industry is particularly guilty of this and you really must be a prophet too see tomorrow before you can collect their loan.
Plain and simple, [b]confiscation of asset is what easily come to play as an option of getting back their money which is always included as collateral.

Thing is like I said, this case is simply politics game gone bad. The banks know the business is still profitable, Etisalat knows they got a great brand name. If they stop bearing etisalat, customers will be lost. Yea rite, some great loss to potential investors. So, the banks are not actually after their money, it's simply a case of business gone bad, reasons best known to parties involved. @ last bolded, confiscation of properties works best for small/medium businesses and not big businesses like etisalat. Who will buy the assets? At what valuation? Most assets of these companies depreciates and are usually devalued almost every year. For instance, will a mast never appreciates. So you see, the know they will be at a loss. Rather, they know they business has to keep operating. The banks already know which company is taking over.

majekdom2:
Thing is like I said, this case is simply politics game gone bad. The banks know the business is still profitable, Etisalat knows they got a great brand name. If they stop bearing etisalat, customers will be lost. Yea rite, some great loss to potential investors. So, the banks are not actually after their money, it's simply a case of business gone bad, reasons best known to parties involved. @ last bolded, confiscation of properties works best for small/medium businesses and not big businesses like etisalat. Who will buy the assets? At what valuation? Most assets of these companies depreciates and are usually devalued almost every year. For instance, will a mast never appreciates. So you see, the know they will be at a loss. Rather, they know they business has to keep operating. The banks already know which company is taking over.

Anyway you have a point. I have been educated by you. Thank you.

praisedigx:
Its quite gonna be a huge loss to the internet users...

its not going to be.The service continues, its probably going to be a change of Name.if u have N10000 airtime..relax, nothing will happen to it.

you will still be enjoying the best service that you have always enjoyed.

How are you sure they collected the loan in USD ? Since the money was borrowed from our indigenous banks and the money was use for the purpose of expansion of its markets.

They were unable to service the loan even when the economy was favourable.

Nltaliban:
I think the federal government should just step into this before Nigeria looses all its potential investors.

They should step up by doing what exactly?

God please help Nigeria

The problem is as a result of short sightedness and gross incompetence of nigerian banks. How can nigerian banks give loan in foreign currency to a company operating in nigeria naira. How would theycexpect such company to repay such loan if there is higher exchange rate againt naira like the one we had in 2016. This is a major bad decision of the banks and cbn not the etisalat.
But because the cbn dont want those banks to fail. It allowed them to acquired etisalat to cover their imcompetences

If you are a Artificial Intelligence Expert read this http://www.technologywatch.com.ng/2017/07/google-launched-gradient-ventures-support-ai-startup.html

So The Staffer Of This Company Mostly Nigerians Wl Nw Left Redundant. Its A Pity, I Solicit Govt. intervention pls.

Jaiyeola24:
All these are written in the Facility agreement, it was read and understood by both parties before the parties involved apexed their signature, the banks are there to make profit and this is one of the ways banks makes profit and that's why you need to do your SWOT Analysis very well before you make business decisions. This should serve as a learning event for investors.
Mind you this is not peculiar to Nigeria only that is how it works anywhere in the world except for JAIZ BANK that operates Islamic banking their facility is more investor friendly if you borrow from them and run at loss you will only pay back the principal they will forgo the interest.

hmm

Sezua:

Exchange rate? Would have made more sense if he said interest rate.

exchange rate




We are talking about dollars here

econity:
How are they paying twice, did they borrow the money in dollar or naira?

dollar

donralph2000:
Wait o...... come to think of it........ Dangote has this kind of supercilious immunity and advantages when it comes to forex (I. e) He gets dollars at subsidized rates compared to what other companies get it. From my own opinion. ...... I think politics is at work and playing at its finest! !!
If it was to be Dangote in this mess.......... the federal government would intervene by paving a successive platform for Dangote group to bounce back by ......... asking the bank ⛻ to culb their excess dollar rate to the actual rates the loan was collected

Good one here

the federal government is always swift at that

Nltaliban:
It's no longer news that Etisalat is backing out from Nigeria after CBN in collaboration with some banks took over the company. 

Am not a marketer or something, but I don't want to be sentimental. The truth is ETISALAT NIGERIA GOT LOAN FROM THE BANK WHEN EXCHANGE RATE WAS FAVORABLE, WHEN NIGERIA WAS TOGETHER. HOPING TO PAY BACK AT THE SAME RATE. but looking at how the exchange rate has skyrocketed, one would know that it's wouldn't be the same for Etisalat Nigeria the exchange rate is now twice of the amount it was when the acquired the loan. Meaning that the would be paying twice the amount they loaned INTEREST NOT INCLUDED this is cruelty at its peak. 

I think the federal government should just step into this before Nigeria looses all its potential investors. 

Why do i have a feeling that you are one off those in the restructure federalist gangs roaming round the public space.

The Federal government is not father Christmas

Great post but I have to correct an error.
Etisalat Group, one of the shareholders of the company has left but tthe entity (company) is still very much in operation in Nigeria. A man can change his name but those that mean the man is no more?
Airtel rebranded 5 times: Econet, Vodacom, V-Mobile, Celtel, ZAIN and Airtel.
Rebranding or change of ownership has never been a death sentence rather it is a normal, healthy business transition like the Phoenix which rejuvenates itself anew.
ETISALAT's own case is no different from global business transitions.
The redefined brand comes out better, stronger, positioned and determined to satisfy its customers.
Watch the matrix part 1 to have a perfect understanding of what coming alive does to a brand (neo effect).

analuwe:
Great post but I have to correct an error.
Etisalat Group, one of the shareholders of the company has left but tthe entity (company) is still very much in operation in Nigeria. A man can change his name but those that mean the man is no more?
Airtel rebranded 5 times: Econet, Vodacom, V-Mobile, Celtel, ZAIN and Airtel.
Rebranding or change of ownership has never been a death sentence rather it is a normal, healthy business transition like the Phoenix which rejuvenates itself anew.
ETISALAT's own case is no different from global business transitions.
The redefined brand comes out better, stronger, positioned and determined to satisfy its customers.
Watch the matrix part 1 to have a perfect understanding of what coming alive does to a brand (neo effect).

I pray the bolded happens

I think is just the name that will be changed so no cause for alarm

Nltaliban:
It's no longer news that Etisalat is backing out from Nigeria after CBN in collaboration with some banks took over the company. 

Am not a marketer or something, but I don't want to be sentimental. The truth is ETISALAT NIGERIA GOT LOAN FROM THE BANK WHEN EXCHANGE RATE WAS FAVORABLE, WHEN NIGERIA WAS TOGETHER. HOPING TO PAY BACK AT THE SAME RATE. but looking at how the exchange rate has skyrocketed, one would know that it's wouldn't be the same for Etisalat Nigeria the exchange rate is now twice of the amount it was when the acquired the loan. Meaning that the would be paying twice the amount they loaned INTEREST NOT INCLUDED this is cruelty at its peak. 

I think the federal government should just step into this before Nigeria looses all its potential investors. 

ds is a huge mistake, its suppose to be mtn, dey mistakenly confused for etisalat

Nltaliban:

exchange rate




We are talking about dollars here

But then the post didn't say if it was naira or dollars. I'm sure the op knows nothing about what actually happens

Poor financial practise from Etisalat. Taking out a loan in foreign currency when your receivables are in a domestic currency. Then, also making the mistake of not hedging. They should have bought dollar forwards in order to hedge out any increase in exchange rates.

The more likely thing is that the loans were diverted as any reasonable finance/risk department would have arranged Non deliverable forward contracts that would allow them to cover any increase in exchange rates.

Nltaliban:
It's no longer news that Etisalat is backing out from Nigeria after CBN in collaboration with some banks took over the company. 

Am not a marketer or something, but I don't want to be sentimental. The truth is ETISALAT NIGERIA GOT LOAN FROM THE BANK WHEN EXCHANGE RATE WAS FAVORABLE, WHEN NIGERIA WAS TOGETHER. HOPING TO PAY BACK AT THE SAME RATE. but looking at how the exchange rate has skyrocketed, one would know that it's wouldn't be the same for Etisalat Nigeria the exchange rate is now twice of the amount it was when the acquired the loan. Meaning that the would be paying twice the amount they loaned INTEREST NOT INCLUDED this is cruelty at its peak. 

I think the federal government should just step into this before Nigeria looses all its potential investors. 

A big mistake that the loan was not structured in Naira.

Big lesson.

400billionman:


A big mistake that the loan was not structured in Naira.

Big lesson.

yea