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18 May 2024

Etisalat scraps $2bn loan plan

By Reuters

United Arab Emirates-based Etisalat has scrapped plans to raise a $2 billion loan despite the telecommunications firm having the funds agreed with a group of local and international banks, sources aware of the matter said on Wednesday.

Etisalat was among a number of regional companies which had sought to secure funding in recent months on the expectation that higher US interest rates would push up borrowing rates later in the year.

However, the companies informed the group of banks supporting the loan in the last few days that it would no longer require the funds as the firm had sufficient liquidity, according to two sources aware of the matter.

"The message from the company was very unclear but it seems the board didn't agree to go forward as they felt they were highly liquid," said one of the sources, a UAE-based banker.

No one at Etisalat was immediately available for comment.

The firm was seeking a three-year loan which would be structured as a revolving credit facility and used as a back-up line of credit, sources told Reuters in December.

Since then, a group of 10 local and international banks agreed to equally fund the $2 billion amount, according to the UAE-based banker, with both sources stating the loan was due to close shortly.