The debt crisis rocking Etisalat Nigeria took a new turn on Monday when the company’s Chief Executive Officer (CEO), Mr. Matthew Willsher, and Chief Financial Officer (CFO), Mr. Wole Obasunloye, resigned their appointments.

Their resignation came a few days after its Emirati non-executive directors (NEDs), representing the interests of Mubadala Development Company and Emirates Telecoms Group Company (Etisalat Group) also stepped down from the board, following the Nigerian company’s inability to meet its loan repayments amounting to $1.2 billion to 13 Nigerian banks.

The resignations also followed Etisalat Group’s reporting disclosure on the Abu Dhabi Stock Exchange two weeks ago that it had pulled out of Etisalat Nigeria and was transferring 45 per cent of its stake and 25 per cent of its preference shares in its Nigerian subsidiary to United Capital Trustees Limited, the legal representative of the lending banks.

Aside Etisalat Group, other shareholders of Etisalat Nigeria include Mubadala Development Company with a 40 per cent stake and Emerging Markets Telecommunications Services (EMTS), representing the Nigerian shareholders, with 15 per cent.

Etisalat had in 2013 approached a consortium of 13 local banks for a loan of $1.2 billion for network upgrade and expansion. The money was sourced in dollar and naira denominations.

However, citing the economic downturn of 2015-2016 and naira devaluation, which negatively impacted on the dollar-denominated component of the loan, Etisalat wrote its creditors informing them of its intention to halt the repayment of the loan in instalments, until such a time that it was able to raise more money.

Unsatisfied with the excuse from Etisalat, the banks threatened to take over the operations of the telecoms company should it fail to meet its payment obligations.

The situation forced Etisalat to enter into negotiations with the banks, seeking unreasonable write-offs, which the banks rejected.

Banks involved in the loan deal include: Zenith Bank, GTBank, FirstBank, UBA, Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank.

It was reported that a breakdown of the amounts owed the banks showed that Zenith Bank has the highest exposure to Etisalat amounting to $262 million and N80 billion, GTBank has the second highest exposure of $138 million and N42 billion, Access Bank follows with $131 million and N40 billion.

Etisalat also owes UBA $125 million and N38 billion; FirstBank – $79 million and N24 billion; Fidelity Bank – $56 million and N17 billion; Stanbic IBTC – $25 million and N7.5 billion; FCMB – $15 million and N4.5 billion; and Ecobank – $10 million and N3.1 billion.

But Etisalat, in a statement two weeks ago, had countered this information, stating that it had paid $500 million up till February 2017. It said the outstanding loan to the lenders stands at $227 million and N113 billion, a total of about $574 million if the naira portion is converted to US dollars.

It was also reported that the CFO of the company was alleged to have diverted an estimated $700,000 realised from the sale of its telecommunications masts to IHS, a Nigerian towers and telecommunications infrastructure provider, instead of using the funds to repay the banks.

According to bank officials, they had financed the importation and purchase of the towers through Huawei of China to help build the infrastructure backbone for Etisalat.

But when the teleco earned foreign currencies from the sale, Etisalat failed to repay its US dollar loans as was done by other telecos like MTN and Airtel.

As a result, the lending banks had resolved to take over the firm and pursue the prosecution of Etisalat’s directors.

However, their bid to take over Etisalat was halted by the Nigerian Communications Commission (NCC), the telecoms industry regulator, which made it clear that its licence was not transferable without its approval. NCC’s position was backed by the Central Bank of Nigeria (CBN).

The suspicion is that the mass resignations were an attempt by the directors and senior executives of Etisalat to absolve themselves of criminal and civil liability over the debt default.

As of press time, the NCC and CBN were in yet another crucial meeting with the banks and officials of Etisalat to address the crisis.

It was expected that a decision would be made on the appointment of new directors, CEO and CFO for the company and may be announced on Tuesday.