Etisalat group has been approached by Nigerian banks after Etisalat Nigeria failed to make a payment on its loan of $1.2 billion, as reported by Reuters

According to an unnamed source, Etisalat Nigeria had given notice to lenders that it would miss a February payment which triggered a debt discussion, adding that they were yet to renegotiate the terms. The source added that lenders have asked Etisalat Nigeria to convert shareholder loans on their books into equity and inject fresh capital to free up its cash flows, in addition to asking that Etisalat increase its 40% stake in the local cellco.

Etisalat signed a $1.2 billion loan with 13 banks in May 2013 to refinance its commercial medium term debt and to continue its network rollout and modernisation, according to TeleGeography’s GlobalComms database.

Ibrahim Dikko, vice president for regulatory affairs at Etisalat Nigeria, said the operator has missed payments due to an economic downturn and currency devaluation in the West African nation, as well as dollar shortages on the country’s interbank market.