9mobile, formerly known as Etisalat Nigeria, repaid part of a loan taken from a group of banks following its acquisition by Teleology Holdings Limited.
The head of investor relations at United Bank for Africa, Abiola Rasaq said “the money has been distributed to the banks”. He noted that the reimbursement is expected to improve the asset quality of the creditor banks that had classified the loan as non-performing.
United Bank for Africa, which is one of the institutions that received a payment, made a 15.2 billion naira ($41 million) provision on the loan last year.
Two sources familiar with the matter told Bloomberg the telecoms firm paid $251 million from the funds Teleology paid for the acquisition.
The Nigerian unit of Emirates Telecommunications Corp., or Etisalat, was taken over by creditor banks in 2017 after it defaulted on $1.2 billion loan payments. Regulators and the firm’s interim board appointed Barclays Africa to prepare it for sale to core investors in order to avert a collapse of the company.
Teleology emerged as the preferred bidder and took over the firm. More than 10 banks including Access Bank, Guaranty Trust Bank and Zenith Bank syndicated the loan to Etisalat Nigeria. Some lenders had classified the loan as non-performing in 2017 and 2018.
According to sources, each creditor bank was repaid a share of the outstanding debt.