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9mobile gets reprieve as creditor banks agree to restructure loan

Embattled telecommunications operator, 9mobile ( formerly Etisalat Nigeria) may have received some breather from the consortium of 13 bank creditor banks which has agreed to extend repayment of its $1.2billion loan, pending when it finds new investors.

An FCMB source which confirmed to Reuters on the restructuring yesterday said the banks have also agreed to put further provisioning on the facility on hold.

 “In terms of provisioning, there is hold on that. What we have agreed is an extension and we have agreed to extend pending the sale to new investors,” the bank told an analysts call, after it published half-year results

The relief came few weeks after the Central Bank of Nigeria (CBN) and the Nigeria Communications Commission (NCC) two of the nation’s regulators stepped in last month to save Etisalat Nigeria from collapse and prevent the banks from placing the country’s fourth biggest telecoms group into receivership, prompting a board, management and name change.

The banks, many of which are reporting first-half results, have been trying to work out the value of 9mobile before deciding whether to impair the loan or wait until the company finds new investors.

 FCMB, which is owed 4.5 billion naira by the telecoms group, said lenders had put a hold on taking provisions on the debt and that they were working with the regulators.

Other banks 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.

GT Bank with $138 million in outstanding loans to 9mobile and Access Bank with $131 million are among the most exposed.

 9mobile Chief Executive, Boye Olusanya, told Reuters he was focused on getting the telecoms group back on track to make a profit, while working on the paperwork to eventually raise new capital. He has also asked the telecoms regulator for concessions on spectrum and foreign exchange access to help to shore up revenues.

The telecoms group has hired Citigroup and Standard Bank to find investors to buy into the firm even as  three companies have so far  shown interest, a banking source close to the deal said.

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