It is expected that if you move into a familiar investment anytime, even before the stability is restored to either the market or the industry that was hitherto awash with instability, you will do well indeed. However, this takes courage, conviction, and ability to disregard your emotions.
In most businesses in recent times, this is not the case. In spite of the above long known and established fact and expectation, many companies are still running into murky waters with their investments and relationships with their investors, just as the case with Etisalat Nigeria.
Initially, anonymous officials of the bank and the Nigerian Communication Commission (NCC), the industry regulatory agency, had disclosed that Etisalat Nigeria, which enjoys 14 percent Nigerian market share, would indeed be taken over by three Nigerian banks, the takeover being as a result of debts incurred by the Mobile Network over the years.
According to sources, Etisalat obtained loans — amounting to $1.72 billion — from a consortium of foreign and Nigerian banks in 2015 to facilitate reconstruction and expansion of Etisalat’s network operations here in Nigeria. Meanwhile, the banks are claiming that they are being pressured by Assets Management Company of Nigeria (AMCON) to reclaim the loan by all means.
It is expected that Etisalat Nigeria should have from the onset adopted a proactive approach by engaging a competent IR services team that effectively combines analysis and research, with strong experience in providing strategic counsel, to help them achieve measurable results from their financial communications efforts.
It is the team that ought to bring to bear a diversity of experience in investment banking, corporate finance, public policy, government affairs, corporate communications, journalism, academia and law to help Etisalat Nigeria tackle unique situations such as this.
This approach should have not only broadened the base of long-term investors, it should have also helped maximize shareholder value and reduce the company’s overall cost of capital. The ultimate goal of this approach should have by extension been to build the company’s corporate brand so that it is recognized as one of the leaders in its industry.
Entirely private company though, looking at the above issue, below are 7 key likely Investor Relations (IR) problems that Etisalat Nigeria ought to consider long before the debt case:
- Communicating long-term strategic vision: Etisalat Nigeria ought to seek and put in place an investment advisory team comprising investor relations managers that could communicate the company’s long-term strategic vision.
- Clarifying business strategies: With diversified backgrounds in finance, marketing, policy, law and communications, their investor relations team should have offered expertise at clarifying their business strategies.
Their IR team supposed to capture insight from important investment decision makers and influencers in order to convey the company’s story and messages.
- Creating management credibility: They should have communicated their economic proposition, while establishing, enhancing and protecting the management’s credibility.
- Creating investors’ confidence: It is their business strategy, if properly understood, that ought to create credibility for the future-value proposition of the company.
- Building investors’ confidence: To succeed in today’s environment, the company should have differentiated itself by building investors’ confidence in its ability to create measurable value.
- Articulating the business model: The foundation to the company’s corporate reputation among investors should have been to clearly define and articulate their business model.
- Shaping perceptions: Long before now, their IR team should have helped the company to shape perceptions so they accurately reflect the company’s growth potentials, performance, corporate reputation, goals and strategies.
In considering the above key investor relations facts, Etisalat Nigeria would have earlier enough considered and adopted compulsory (legal) and optional (self-regulatory) responsibility that integrates finance, communication, marketing and legal requirements for a smooth relationship with their various stakeholders. This unarguably would have helped to forestall the problem in which they have found themselves now in the country.