Guaranty Trust Bank, GT Bank, has agreed to restructure the N42 billion ($138 million) loan which is the banks share of the $1.2 billion debt a telecom company, Etisalat, owed three Nigerian banks, including Zenith and Access Banks.
Chief Executive Officer of the bank, Mr Segun Agbaje, was quoted by Reuters as saying that the bank was exposed to Etisalat Nigeria to the tune of N42 billion ($138 million) via a secured loan, and would go through a restructuring of the debt.
The loan saga started last week when the telecom company informed its creditors in February that it would miss payment on the $1.2 billion loan.
Apparently, the banks feared that inability to recover the loan could expose them to the Asset Management Company of Nigeria, AMCON, which had been demanding immediate cut down on the rate of their non-performing loans.
The loan facility, totalling $1.2 billion (about N541.8 billion) involving a foreign-backed guaranty bond, was for Etisalat to turn around its network and expand its operations in Nigeria.
However, the banks claimed that Etisalat had failed to service the debt as agreed since 2016.
They subsequently reported Etisalat to the Central Bank of Nigeria, CBN, and its communications sector counterpart, National Communications Commission, NCC.
Meanwhile, the NCC and CBN had prevailed on the three local banks to pursue a default deal rather than a receivership for Etisalat Nigeria so as not to deter investors and to avoid a wider debt crisis.
Sources say another meeting will be held today between the two regulators, Etisalat and the creditors to discuss the default.
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