According to reports by Reuters News Agency, banks are refusing Etisalat Nigeria to convert part of a $1.2 billion loan from dollars into naira.

They are proposing that and want Abu Dhabi telecoms group Etisalat and its other shareholders to recapitalise it instead, a source said.

A banker with knowledge of the negotiations told Reuters News Agency that the seven-year syndicated loan, on which Etisalat Nigeria missed a payment, has a dollar portion of $235 million which the telecoms operator wants to convert into naira to overcome hard currency shortages on Nigeria’s interbank market.

“Etisalat is asking for us to convert the dollar component to naira but banks don’t want that option and have told them to talk to their parent to settle the loan,” the source said, adding that regulators favoured the conversion.

The UAE’s Etisalat own 45 percent of Etisalat Nigeria, while Abu Dhabi’s Mubadala [MUDEV.UL] owns 40 percent of the company, which is due to meet its lenders on Thursday for debt talks mediated by Nigeria’s central bank and the telecoms regulator.

This meeting came about after authorities agreed with local banks to prevent Etisalat Nigeria, which was not available for comment, going into receivership.