Nigeria banks trying to stabilise 9mobile ahead of sale, FBN says
(Adds CEO comments on cleaning up loan book)
By Oludare Mayowa
LAGOS, Aug 3 (Reuters) - Nigerian lenders will try to stabilise the business of 9mobile, the country's fourth largest telecoms group, until they can find new investors, First Bank said, adding that it saw no need to impair loans made to the company, because of its cash flows.
"On the part of lenders, we are trying to reposition the company till we find new investors. With the level of cash flow we believe there will be no need for impairment," the bank's chief executive Adesola Adeduntan said on an analysts' call.
Another lender, FCMB, said on Tuesday lenders had agreed to extend a $1.2 billion loan which the mobile operator, formerly known as Etisalat Nigeria, took out four years ago but struggled to repay due to a currency crisis and a recession in Nigeria.
Nigerian regulators stepped in last month to save Etisalat Nigeria from collapse and prevent lenders placing the country's fourth biggest telecoms group into receivership, prompting a board, management and name change.
The local banks which participated in the loan, 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.
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.
The telecoms group has asked Citigroup and Standard Bank to find an investor to buy into the firm and three companies have shown interest, a banking source close to the deal said.
Adeduntan said First Bank is committed to cleaning up its loan book and will be focusing on the recovery of non-performing loans.
He noted that the bank is expected to recover and write back about 20 billion naira from its non-performing loans by the end of the 2017 financial year.
First Bank has set a target to grow its loan book by 12 percent by the end of the year, the chief executive said.
The bank's shares closed flat at 6.03 naira on the local bourse on Thursday. (Reporting by Oludare Mayowa; Writing by Chijioke Ohuocha and Ulf Laessing; Editing by Adrian Croft)
