Zenith Bank says it has made a provision of 30 percent on its loan to 9mobile, the country’s fourth largest telecoms company.
“We have taken about 30 percent … as a provision which we believe is very prudent as the company is undergoing restructuring to prepare for a new investor,” the bank’s Chief Executive Officer, Mr. Peter Amangbo, told a conference call.
The Federal Government had stepped in last month to save 9Mobile’s predecessor, Etisalat Nigeria, from collapse and prevent commercial banks from placing the telecoms firm into receivership. The move led to board, management and name change.
The telecoms firm had taken out a $1.2bn loan four years ago from a consortium of banks but failed to repay it due to foreign exchange crisis and recession in the country.
Zenith Bank is the largest lender to 9Mobile, one source familiar with the matter said. The bank has declined to disclose its total exposure to the telecoms group.
The local banks which participated in the 9Mobile’s loan deal are: Zenith Bank, Guaranty Trust Bank, First Bank, UBA, Fidelity Bank, Access Bank, Ecobank, FCMB, Stanbic IBTC Bank and Union Bank.