Etisalat Nigeria has terminated a management agreement with its Nigerian arm.
Reuters reports that the company has given few weeks to operators of the brand to phase out Etisalat in Nigeria
The chief executive of Etisalat International, Hatem Dowidar, said the company, with a 45 percent stake in the Nigerian business, is transferring its shares to a trustee after talks to renegotiate a $1.2 billion loan failed.
Dowidar said all UAE shareholders of Etisalat Nigeria, including state-owned investment fund Mubadala, had exited the company and left the board and management.
He said 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,” he said.
Etisalat Nigeria took out the loan with 13 local lenders in 2013 to refinance an existing loan and fund expansion but struggled to repay four years later.
When asked if the company will return to the country anytime soon, Dowidar said “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?”
“Etisalat is among the top two in markets such as the UAE, Saudi Arabia, Morocco, Egypt and Afghanistan,” he said.
“(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.
“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.”