ISLAMABAD: Pakistan Telecommunication Company Limited (PTCL) is preparing to acquire Telenor Pakistan for the sum range between $800 million to $1.2 billion, via a non-binding bid.
Earlier, the PTCL Board of Directors had expressed interest in acquiring a majority stake in Telenor Pakistan. Besides, they hope to the entity with management control.
Payment in Dollars
The PTCL’s parent company, Etisalat, will provide guarantees to raise commercial loans for the deal. Telenor’s management sought the payment to be made in dollars towards finalization of the arrangements and moving ahead to accomplish the deal.
PTCL had expressed an interest in acquiring Telenor Pakistan’s shares to Prime Minister Shehbaz Sharif. The deal is expected to be sealed once both sides accept the negotiated terms..
The Etisalat Lingering Difficulties Though
Etisalat also requested government to brace up for paying the value of the contract in dollars outside of Pakistan. The negotiations are taking place at a time when the country’s ongoing dollar liquidity crisis is all time high.
However it has also lingering dues of about $800 million towards PTCL. The privatization payments remain unresolved since 2005-6.
More so, difficulties persist in the transfer of land in the name of Etisalat in several parts of the country.
Upon closing the deal, PTCL would operate two companies in Pakistan, the Ufone and Telenor Pakistan. The Ufone’s balance sheet curtails it to purchase another large entity. In this way Etisalat is prepared to play a lead role in closing this anticipated take over.
If the PTCL makes a binding offer, the ECC of the Cabinet and the Federal Cabinet must approve it as GOP owns shares in PTCL.
dar in the Chair
According to a Ministry of Finance, Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar presided over a meeting on the telecom sector at the Finance Division.The discussion focused on the telecom industry in general and PTCL in particular.
Dar emphasized the nominee directors of the government on the PTCL Board to contribute actively towards materializing the deal for the best possible performance of the PTCL.
Syed Amin Ul Haque, Federal Minister for Information and Telecommunications, Senator Azam Nazeer Tarar, Federal Minister for Law and Justice, Secretary Finance, Secretary Privatization, and Secretary IT & Telecom all attended the meeting.