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Etisalat Nigeria Meets Banks for $1.2bn Debt Restructuring Talks



  • Etisalat Nigeria Meets Banks for $1.2bn Debt Restructuring Talks

The Nigerian arm of Abu Dhabi telecom group Etisalat met lenders in London yesterday for talks on restructuring a $1.2 billion debt, Access Bank CEO Herbert Wigwe has revealed.

Etisalat Nigeria signed the $1.2 billion medium-term facility with 13 local banks in 2013 to refinance a $650 million loan and fund the modernisation of its network, but is now struggling to repay the debt.

Access, one of the lenders in that consortium, is owed N40 billion ($131 million) by Etisalat Nigeria and more by its contractors, although Wigwe declined to specify how much.

“They are in London having a meeting as we speak. In the course of next week we would get clearer visibility on how to go about (the debt restructuring),” Reuters quoted Wigwe to have told analysts during a conference call to discuss the loan as part of its first-quarter results.

A number of firms invested aggressively in the West African nation in the era of high oil prices but are struggling to repay loans or keep operating as the oil producer suffers from a slump in global crude prices that has hammered its revenues, its currency and dollars reserves.

Wigwe said the banks needed to verify all the debts on Etisalat’s books, especially those to trade creditors such as IHS, which has said Etisalat owe it a payment of $8.5 million for more than 120 days since Dec. 31.

Another lender, First Bank, confirmed that there was a meeting in London and said it was positive that the loan would be restructured as guided by the regulator and repaid.

First Bank said that its exposure to Etisalat was about 1.25 per cent of its N2.1 trillion ($7 billion) loan book and that it could write it off if necessary.

A source said Etisalat had asked lenders to convert the dollar portions of its loans into naira to help it overcome the shortage of hard currency on the interbank market but that lenders were opposed to this idea. Wigwe said several options were being considered.

“We have done some financial restructuring which we have not closed on. We are hoping to get an agreement with everybody,” Wigwe said.

Nigerian dollar liquidity has been improving recently, with the central bank intervening in the interbank market since February.

Wigwe said his bank is also exposed to Nigeria’s biggest airline, Arik Air, which was placed under receivership by state-owned “bad bank” AMCON with debts of about N8 billion but only around N3 billion to cover them.

He said AMCON was looking at ways to resolve the Arik debt, either through a sale or a recapitalisation.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and, with over a decade experience in the global financial markets.

Crude Oil

Brent Crude Oil Approaches $70 Per Barrel on Friday



Crude oil

Nigerian Oil Approaches $70 Per Barrel Following OPEC+ Production Cuts Extension

Brent crude oil, against which Nigerian oil is priced, rose to $69 on Friday at 3:55 pm Nigerian time.

Oil price jumped after OPEC and allies, known as OPEC plus, agreed to role-over crude oil production cuts to further reduce global oil supplies and artificially sustain oil price in a move experts said could stoke inflationary pressure.

Brent crude oil rose from $63.86 per barrel on Wednesday to $69 per barrel on Friday as energy investors became more optimistic about the oil outlook.

While certain experts are worried that U.S crude oil production will eventually hurt OPEC strategy once the economy fully opens, few experts are saying production in the world’s largest economy won’t hit pre-pandemic highs.

According to Vicki Hollub, the CEO of Occidental, U.S oil production may not return to pre-pandemic levels given a shift in corporates’ value.

“I do believe that most companies have committed to value growth, rather than production growth,” she said during a CNBC Evolve conversation with Brian Sullivan. “And so I do believe that that’s going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day.”

Hollub believes corporate organisations will focus on optimizing present operations and facilities, rather than seeking growth at all costs. She, however, noted that oil prices rebounded faster than expected, largely due to China, India and United States’ growing consumption.

The recovery looks more V-shaped than we had originally thought it would be,” she said. Occidental previous projection had oil production recovering to pre-pandemic levels by the middle of 2022. The CEO Now believes demand will return by the end of this year or the first few months of 2022.

I do believe we’re headed for a much healthier supply and demand environment” she said.

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Crude Oil

Oil Jumps to $67.70 as OPEC+ Extends Production Cuts




Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.

OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.

Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”

Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.

Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.

Experts have started predicting $75 a barrel by April.

“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”

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Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin



Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges

Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.

The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.

The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.

We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.

Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.

Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.

In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.

The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.


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