Vmobile, First Bank, Resolves N5b Loan Face-off
BY EMMA EKE
AT the threshold of the third year anniversary of Global System of Mobile Communications (GSM), Econet (Vmobile) and First Bank of Nigeria Limited have resolved the controversy over the bank's N5 billion loan to the telecommunications company.
Mr William Swart, the Managing Director/Chief Executive Officer of Vmobile, explained the development that led to the compromise, during the public presentation of its new brand of GSM.
Swart said that the understanding was arrived at after a frank meeting between the new management of Vmobile and that of First Bank.
There had been some row over the request by the former management of Vmobile that First Bank should convert its loan to shares and be part of the telecom company.
The issue, which drew flak from the managements of the two companies, took a new dimension when the government restructured the bank.
Thereafter, First Bank, which led a consortium of three other banks to provide a syndicated loan of about N5 billion to Econet, refused to convert its aspect of the debenture, the highest in the loan syndication, to shares until lately.
Swart expatiated the new agreement to The Guardian in an interview: "I can say right away that what has stood as a problem between us and First Bank has been finally resolved. Today, the bank is part and parcel of Vmobile.
"They have agreed to convert the debenture to equity shares and we are happy with that understanding in that regard."
He, however, declined to give details of behind the scene aspect of the meetings between his company and the banks before a compromise was reached.
But a senior management staff of First Bank told The Guardian at the weekend, that though the issue had been handled in the "most civilised manner," there were still some outstanding developments to be tackled "before it could be said to have finally died dawn."
The official said that because the problem had taken a toll on the bank, including causing some disaffection between the bank's former management and the Federal Government, it would take a little while for the final rectification of the agreement.
In the interim, officials of Vmobile have refuted the speculation that the issue of the loan syndication contributed to the face-off that led to the sudden withdrawal of Vodacom company from Econet, in less than six months of its entering into management agreement with the former Econet Wireless Nigeria (WIN).
Mr. Emeka Oparah, the Public Relations Manager of Vmobile, said that, "there was no link whatsoever" with the bank's stance on the loan and the termination of the contract by Vodacom.
He said: "The most relevant issue is, how much did Vodacom put down in the agreement Were they in the management team that signed for any major financial transaction for the company, either as WIN or V-Network"
Oparah stated that the confidence the corporate world has in his company has continued to grow in leaps and bounds, hence the ability of the new management to come out with the solution to the vacuum, which the pulling away of Vodacom could have created.
However, on the number of subscriber lines that the company targets under the new initiative, neither Swart nor Oparah agreed to come up with figures.
But a marketing officer of the company said that not less than two million lines were being planned in the next six months.
Meanwhile, the other GSM operators said they would, in the spirit of the 3rd anniversary of the emergence of the system, offer a number of incentives, including cheaper tariff on most of their services.
Separate statements by MTN, Globacom and Mtel, all licensees of the Nigerian Communications Commission (NCC) maintained that in the spirit of the celebration, efforts would be made to reduce the rate at which calls drop between one network and another.
