Some shareholder groups in the capital market, yesterday, urged Etisalat Nigeria to settle the $1.2 billion debt it owed 13 commercial banks to avoid a takeover.

A cross section of the shareholder groups stated this in an interview with the News Agency of Nigeria (NAN) in Lagos on Tuesday. They insisted that the company must settle the debt for the banks to meet up with their dividend obligations.

The National Coordinator, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie, called on Etisalat to settle the debt owed the commercial banks to avoid a legal action.

Okezie said the affected banks should approach the court for receivership if Etisalat failed to settle the debt.

He stated that the banks had obligations to their shareholders in terms of dividend payment at the end of the financial year, insisting that the debt must be paid.

Also, the Chairman of Nigeria Professional Shareholders Association, Mr. Godwin Anono, said the company should settle the debt and desist from making unnecessary noise about the whole thing.

Anono said further that the shareholders were in support of the banks to acquire the company if it failed to settle the loan.

“This is like any other transaction, it’s not government business and I stand on existing protocol that the banks should acquire the company,” he said.

Head of Research, SCM Capital Ltd., Mr. Sewa Wusu, said the issue was beginning to elicit concerns in the banking industry given the level of amount involved and its potential impact on the balance sheets of those banks involved.

“But I think the monetary authority is also involved to ensure prompt settlement of the situation among the parties,’’ he said.

Etisalat, on June 20, said it had been instructed to transfer its 45 per cent stake in Etisalat Nigeria to a loan trustee.

It said it had been notified to transfer its stake by June 23, saying that the stake had a carrying value of zero on its books.

However, in the last few months, Etisalat Nigeria has been in talks with Nigerian banks to restructure a $1.2bn loan after missing repayments.

The loan is a seven-year facility agreed with 13 banks in 2013 to re-finance a $650m loan and fund expansion of its network.

Although the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria stepped into the fray to prevent a takeover by the banks, those discussions failed to produce an agreement on restructuring the debt.